In Canada, the cost of a university degree is increasing, tuition and compulsory fees expected to triple from 1990 to 2017. It is important to start saving for your child’s education now, along with other retirement or home purchase plans.
What is Registered Education Savings Plan (RESP)?
The Registered Education Savings Plan is a tax-sheltered plan that can help you save for a child's post-secondary education. With the high cost of education, many people recognizing the need to save well before the expenses become a reality. Set up an RESP with use to help you reach your education savings goals for your children.
CLICK HERE to check average post-secondary tuition fees in Canada
Government Grants with RESP
- Canada Education Savings Grant (CESG)
✓ Federal government pays the Basic CESG rate of 20% on the first $2,500 (or less) of annual contributions made to an RESP on behalf of eligible beneficiaries
✓ For an eligible beneficiary, there may be an Additional CESG rate of 10% or 20% on the first $500 (or less) of annual contributions made in 2005 or later
✓ The CESG lifetime limit is $7,200
- Canada Learning Bond (CLB)
✓ The government pays an initial CLB of $500 to eligible children. Subsequent installments of $100 will be available for each year of eligibility until age 15
✓ Depending on the eligibility, the lifetime limit one beneficiary can receive in CLB payments is $2,000
- British Columbia Training and Education Savings Grant
✓ When a B.C. resident child turns six years old (must be born on or after January 1, 2007), they will be eligible for a one-time grant of $1,200 to be deposited into their RESP