Education is one of the biggest expenses that families face. In order to prepare for this, there are different steps that parents can take to ensure the money will be there for their children’s education.
Canada Education Savings Grant
To encourage Canadians to save and plan for their children’s education the government has created the Canada Education Savings Grant.
It begins with parents investing into a registered education savings plan. This can be started by parents or anyone that wants to contribute to the future of a child’s education. Most often a grandparent will want to do this for their grandchildren. When contributions are made to this type of savings plan the Canadian government will also contribute. They will give .20 cents for every dollar the owner of the plan contributes. The maximum amount that can be received is $500.
Based on a contribution made by the plan holder of $2,500. This can continue each year until the child reaches the age of seventeen.
Extra Government Contributions
The government also realizes that some families are in the low or middle-income bracket. This makes it difficult for them to be able to contribute the maximum amount to the RESP. For parents in these income brackets, the government will add an additional maximum amount of $7,200. Over the lifetime of the savings plan.
Canada Learning Bond
Families can receive up to $2,000 towards their child’s education through the Canada Learning Bond. This is deposited into a Registered Education Savings Plan. But, this has to be applied for and is not automatic. Even if parents cannot afford to contribute to the RESP they may still be eligible for this bond.
These are great ways for parents to get started on saving for their children’s education. This combined with their own contributions into the RESP mount up over the years.