Want some tips for how you can get the most out of those government grants? Read on!
If you're a low income family, you can get free money for your child's education (up to $2000 total, without contributing a cent of your own!). You have no reason not to start an RESP with that kind of incentive! Check out the Canada Learning Bond for details and to find out if you qualify! (Hint: if you receive the National Child Benefit Supplement (NCBS), you definitely want to look into this)
The first $500 you contribute each year is going to give you the best return because the government will also contribute a percentage of it! The amount you will get depends on your income and how much you contribute but if you can do $500 you'll get a great return. Read more about the Canada Education Savings Grant to see what amount you could get back from the government! (You could get up to 40% and you can't get that kind of guaranteed return on your investment anywhere else!)
If you did not contribute enough to get the full $500 (from the Canada Learning Bond) in a previous year of your child’s life, you can retroactively contribute money “for that year” and get the 20% (up to $500 for that year). You can only do this for one previous year, each year.
Other Incentives & Benefits
There are some provincial incentives for residents of Quebec, Saskatchewan, and British Columbia. If you live in one of those provinces, you'll want to check those out too! (Details on this website)
Aside from government grants, there are RESP tax benefits. Your investment earnings will be sheltered from tax while your fund grows and when it's time for your child to use the money for school, the money will be taxable under the student's name. The student generally has a lower income, so the taxes paid are likely to be quite low.
If you hadn't heard about these government incentives before, I hope this is the push you need to go out and start one!
This concludes a series of posts about RESPs. I'll link the previous posts below for your reference:
I hope you've found this series to be helpful in understanding what RESPs can offer you and your family. I am so glad my parents started one for me, and I'm glad to know that my girls will be able to benefit from one when the time comes for them to need it. After today's post, I hope you can see that there is no reason to delay (and from my post about compound interest, you know that the sooner you start, the better!).
Disclosure: This post was sponsored by Heritage Education Funds. All opinions shared are my own.