the early bird catches the worm
Just because your little one is still in diapers, it doesn’t mean it’s too early to start thinking about his or her college education!
Let’s face it: post-secondary education is expensive! No ifs, ands, or buts about it. Having a savings plan in place as early as possible helps ensure that no matter what your little guy or gal dreams of being when he or she grows up, you can help make that dream a reality.
With an RESP (short for a Registered Education Savings Plan), the earlier you start saving, the more money you will earn. Basically, over the years, as your little one becomes not so little, the money in the RESP will do the same.
How does it work? A Registered Education Savings Plan (RESP) is a tax-sheltered savings plan designed to help you save for your child’s post-secondary education. You simply make contributions (unfortunately they cannot be used as tax deductions) that accumulate tax deferred earnings and, in return, your child agrees to use the accumulated funds to help pay for his / her education. The funds then just sit and accumulate in an RESP until they’re needed. Now here’s the really good news, an RESP can be used for a variety of education-related expenses including tuition, housing, transportation, books, supplies, and other incidentals relating to the student’s education.
There are a few different types of RESPs (including ones that allow people other than you, the parent, to contribute to) as well as a number of different investment options to choose from. We can help you decide what type of RESP is best based on your individual situation and can walk you through all of your investment options.
Oh, we almost forgot to mention that you need a social insurance number for your child in order to open an RESP. The good news is it’s free to get one and relatively easy to do. Just call 1.800.O.Canada (1.800.622.6232) for more information or stop by a Service Canada Centre near you. There is plenty of information on the Service Canada website we recommend you check out before getting a social insurance number for your child.
For more information on RESPs, visit the Government of Canada’s website.
School is cool and so is saving for it
In addition to RESPs, the Government of Canada also has a number of educational grants as well as the Canada Learning Bond available to make saving for your child’s education a little bit easier.
With the Canada Learning Bond (CLB), the Government of Canada actually puts money into your child’s RESPs, including $500 initially to help you start saving followed by an extra $100 a year up to the age 15. They will also give you an extra $25 to cover the cost of opening the RESP. There are some restrictions regarding who is eligible for the CLB but for those who don’t qualify, you still have the opportunity to get some help from the Government through the Canada Student Grants Program (CSGP). Through CSGP, there are grants available for a wide range of students including students from low and middle-income families, students with disabilities, students with dependents, and even part-time students. More information about these programs and how to register is available on the Canada Learning Bond website and the Canada Student Grants Program webpage.
When you are ready, give us a call or stop by your local branch and we’d be happy to discuss the different options available to give you a head start on saving for your child’s future.
Please note: a $100 fee will be applied to any full or partial registered product transfer out.