How can parents in Edmonton and beyond save for their child's education?

Updated: Sep 16, 2020

A registered education savings plan (RESP) is an investment account designed to help you save for a child's education. RESPs can be used to pay for your child's college or any post-secondary education. They are government-regulated accounts and offer tax-free investment growth.

You can open an RESP in the name of any future college or trade school student. It can be opened by anyone — a parent, grandparent, or even someone unrelated to the child. There’s also something called a “family RESP,” which has the advantage of being able to be spent on any sibling in a family instead of just one child — but it must be opened by parents or grandparents.

The government’s Canadian Education Savings Grant (CESG) will match 20% of up to $2,500 per year per child. And CESG will keep matching annually until it maxes out at $7,200 per child. As long as the money sits in the RESP (accounts can remain open for up to 36 years) all gains will remain tax-free. When a student does withdraw money to pay for tuition or university-related expenses, he or she will owe tax only on the interest, dividends, capital gains, and the government’s CESG contributions.

If a child decides not to pursue post-secondary education, the money can be used by a sibling for his or her education. Or the money can be transferred to the contributor’s personal RRSP retirement account free of any tax penalties- though the CESG contributions will be returned to the government.​

Ready to start saving for your child's education? Let's schedule your free consultation today to get you started saving for your child's future.

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