You may be looking for ways to save up for your child’s future post-secondary education. Crazy as it may sound, you can get money from the government. If you open a Registered Education Savings Plan (RESP) for your child, you’ll have access of up to $7,200 from the federal government for your child’s post-secondary education.
4 facts about RESPs and government grants
Here are some quick facts about how the government encourages parents to open an RESP for their child:
- Saving in an RESP allows you to access government education savings grants.
- The federal government matches your contributions by 20% (limits apply).
- Some provinces offer additional grant money on top of the federal grant.
- The income earned in an RESP is tax-sheltered.
Accessing government grants
Opening an RESP gives you access to government grants, making it an ideal way to help finance your child’s post-secondary education.
How it works is quite simple—through the Canada Education Savings Grant (CESG), the government will match 20% on each dollar you put into an RESP, up to an annual limit of $500, and a lifetime maximum of $7,200 per child. All you have to do is put money into an RESP, and the government will add CESG funds.
And depending upon your household income, you may also be able to access the Canada Learning Bond available for eligible lower income families. By just opening an RESP, these families will receive $500 and could receive $100 per year for each year they qualify up to $2,000 per child.
Maximizing government grants
Don’t forget to also maximize the grants you can get for your child by looking at provincial government incentives. Provinces like British Columbia and Quebec may add money to an RESP on top of any money from the CESG or the CLB. For example, BC offers $1,200 to eligible children through the BC Training and Education Savings Grant (BCTESG).
When you open an RESP, you’re not just preparing for your child’s future, you’re also safeguarding your own. Saving your money in an RESP will help you afford the rising cost of post-secondary education, and government grants are an incredible opportunity to boost your bottom line.
You just learned about:
Ready to start saving?
You may also like
Schedule a free consultation
Have some questions? No problem, schedule a free consultation at a time that is convenient for you.