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Q. Our new baby girl is just turning 5 months old and we want to know what is the best type of account to open for her future and her educational future. Thank you.
A. A new baby girl…how exciting! Congratulations, and good on you for starting early to consider her financial future.
The best savings option is the Registered Education Savings Plan (RESP). An RESP offers flexible deposit options…you can make one lump sum payment per calendar year (prior to December 31st) or set up convenient automatic monthly deposits. For as little as $25 per month your RESP contributions grow tax-free and receive 20% matching government incentive funding. For example, if you contribute $2500 annually the plan will receive $500 in government matching funding. Plus, you may also be eligible for additional grants (above the 20% Canada Education Savings Grant [CESG]) based on your income. This certainly adds up over time and helps reduce your out-of-pocket expenses when your child attends post-secondary education. And, if you don’t contribute the maximum, any unused grant room can be carried forward.
It’s easy to get your RESP plan started…all you need is your and your child’s social insurance number and we can do the rest. With your RESP plan working hard for you, you can relax, knowing your daughter’s post-secondary education is taken care of.
Time really does fly, so celebrate the milestones and enjoy the firsts…first steps, first day of school, first driving lesson, first steps into the world of higher education...
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