|Effective September 09, 2010|
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That’s the great thing about kids. Every one of them is a bottomless well of potential. Who’s to say they can’t grow up to be anything they want?
With the rising price tag for a post-secondary education (surely something they will need to scale those heights), saving for their education is as important as ever.
Luckily, with a RESP, saving for that education is easier than you think – it’s simple to start, you don’t need lots of money to get going, and the government even kicks in bonus money to help you out. So no matter what your child decides to do with their life, the resources to do it will be there.
What is an RESP?
In a nutshell, an RESP is a government sponsored investment plan that helps you save for your child’s post secondary education. And that doesn’t just mean university, since many types of post-secondary programs are eligible.
Current rules allow you to contribute a lifetime maximum of $50,000. All the money earned within the plan grows tax free until it’s withdrawn, and when your child starts using the money for school only the accumulated interest is taxable as income. That’s what lets compound interest build so quickly.
So while your children are growing, your money does the same. It's also important to note that anyone can contribute to an RESP, not just the parents of the child. Coast Capital Savings can help determine if this type of investment is right for you.
You want a great rate, but don’t want to be locked in forever? Get the Rising Rate RESP with the unique “bump or bail” option.
Canada Education Savings Grant
Find out how government grant can add 20% to your annual RESP contributions.
Social Insurance number
A Social Insurance Number is a prerequisite for a RESP, if your child does not have one, apply now.