The federal government offers two grants to children in Canada to fund their education through an RESP account.
And you can open an RESP account as soon as they have a SIN.
One of them, the Canada Education Savings Grant, matches 20% of your contributions up to $500 a year and up to $7,200 per child over their lifetime. That means if you contribute $2,500 a year, you can receive $500 per year. However, you don’t have to contribute a total of $2,500 to receive the grant. They will match any contribution amount.
The second grant is not dependent on contributions. It’s called the Canada Learning Bond, which can add up to an additional $2,000 to their future.
So, if you’re a lower-earning family, that is a total of $9,200 from the government that each of your children could access!
Now that we’ve covered some of the key features, here are some strategies.
Start early. You have the option to invest your contributions and the grants received. If you start young, this leaves plenty of opportunity for growth.
To maximize grants, contribute $2,500 a year, per kid. For one child, that is about $200 a month. If that seems steep, consider asking godparents, uncles and aunts, grandparents or family friends if they would like to set up small, automatic monthly payments too. If you get the family involved, those $2,500 annual contributions can be easier to achieve.
What happens if my kid chooses a different path?
If they choose not to go to school, you can eventually transfer those savings to a retirement savings plan for yourself. You can’t keep the grants, but you keep your contributions and any growth on your contributions.
How do I do it?
Easy. Let us know, and we’ll help you get set up.
Let’s work together.
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