Education Planning


When finding ways to save for your children’s education, it’s important to understand the true costs involved. Not only are there tuition and books to consider, but there will also be living and transportation expenses should a child choose to attend a college or university in another city.  Maybe it’s too soon for you to know whether or not you’ll incur all or some of these expenses – perhaps your son or daughter is still years away from starting their post-secondary education. But by beginning to save now, you’ll be better prepared when the time comes.

A simple way to start saving is to set up a separate account for this purpose. You can begin by contributing to an individual savings plan using one or a number of investments, such as mutual funds or Guaranteed Investment Certificates (GICs). Or, you could invest in a Registered Education Savings Plan (RESP), a specific investment designed for education savings.

The sooner you start an RESP, the longer it has to grow tax-free. RESPs are registered with the Canada Revenue Agency and therefore offer tax advantages that can help you save for your child’s education. RESPs are offered by many financial institutions that manage the contributions and later make payments to the child named in the plan. An RESP allows contributions of up to $50,000 per beneficiary over the lifetime of the plan that can grow on a tax-deferred basis until withdrawn.