The following article is from CPA Canada
The Government of Canada wants to help you save for your child’s post-secondary education. The money could be used for CEGEP, an apprenticeship program, trade school, college or university.
When you open and deposit money into a Registered Education Savings Plan (RESP) the Government of Canada will add at least 20 cents for every dollar saved; this is the Canada Education Savings Grant.
With $2 a day, or about $700 a year, saved in an RESP for a child’s post-secondary education, the Government of Canada will add at least 20 percent, or $140 a year, to the RESP to help the savings grow faster. The Government of Canada will keep adding the Canada Education Savings Grant to the contributions in an RESP until the child is 17, up to a lifetime limit of $7,200. At $2 a day for 17 years, the savings grow to well over $15,000 when you also include the accumulated interest.
If you think money is too tight to start saving in an RESP, consider this:
With the Canada Learning Bond, the Government of Canada will add $500 into that RESP for children from low-income families, born after 2004. Eligible children could receive another $100 a year in the RESP, up to the year they turn 15. That means a child could receive up to $2,000 from the Government of the Canada in an RESP to help cover the costs of their post-secondary education.
Although no money needs to be added to the RESP to get the Canada Learning Bond, the Government of Canada can help education savings in an RESP grow even faster with an additional amount of the Canada Education Savings Grant of 10 to 20 percent on the first $500 added to an RESP.
This means that based on savings of $2 a day, or about $700 a year in an RESP, and the addition of a Canada Education Savings Grant of $140 plus the additional amount of the Canada Education Savings Grant of $100, and the Canada Learning Bond of up to $2,000, and accumulated interest, the savings could grow close to $20,000 over a 17 year period for your child’s post-secondary education.
It’s true that finding the money might be a challenge, but think of it as a long-term investment that will benefit a child for a lifetime. Research shows that by planning for a child’s post-secondary education, and speaking with them about their education after high school, it is more likely that they will attend university, college or trade school.
For more information: Canada.ca/education-savings