Aim high, save safely
Many people dream of a post-secondary education but with the increased costs of college and university tuitions in Canada, this dream is not always easily attained.
While there may be government student loan programs available, these may not be advisable or feasible for everyone. Starting early, you can put money aside in a Registered Education Savings Plan which not only has tax benefits, but will also increase the amount you are able to save for your children’s’ academic pursuits.
An RESP offers flexibility, tax-deferred investment growth and direct government assistance to help you save for a child’s education. Interest income and investment growth earned within an RESP are not taxed as long as the funds remain in the plan.
The Canada Education Savings Grant (CESG) matches 20% on the first $2,500 contributed annually to a maximum of $500 a year ($7,200 overall) for a child under the age of 18, plus possible catch-up grants.8
An RESP won’t expire for 36 years and can be used to help a child, grandchild, niece, nephew or family friend save for his/her higher education.
8 Author Unknown; “Give the gift of knowledge with an RESP”; http://www.rbcroyalbank.com/services/resp; 2014-03-26