In this day in age with the cost of education sky rocketing and likely will be going even higher by the time our toddlers become adults saving for University and post secondary costs will become a great concern for our children. Why not reduce the burden by opening up an RESP for you child from infant hood.
You can do it at your local bank and the government will deposit
For each child named you can put up to $50,000 into an RESP. There is no annual contribution limit. Note that the Government will only add a grant on the first 2,500 saved annually.
Every child up to the age of 17 is eligible to receive the Canada Education Savings grant as long as the child is a Canadian resident and an RESP has been opened for the child.
How much is the grant?
On the first 500.00 you save in your child’s RESP account the Canada Education Savings Grant will give you:
up to $200 if your family income is $38,832 or less, up to $150, if your family income is between $38,832 and $77,664 and up to $100 if your net family income is more than $77,664. (These are amounts for 2009 please note that these numbers are subject to change yearly)
When you save more than $500 annually, the Canada Education Savings grant could add up to $400 on the next $2000 saved.
The maximum lifetime grant the Government of Canada can give to your child through the Canada Education Savings Grant is $7200.
BUT I DON’T HAVE ANYTHING I CAN CONTRIBUTE RIGHT NOW.
This is something I hear a lot. But that doesn’t mean you have to be left out. There is still grant money that can be claimed even when you aren’t able to contribute to the savings.
Canada Learning Bond
The Canada Learning Bond is money from the Government of Canada to help modest income families start saving early for their child’s education after high school.
You can get it if your child was born after Dec 31st 2003 and your monthly Canada Child Tax Benefit payment or baby bonus includes the National Child Benefit Supplement.
If your family qualifies the Government of Canada will make a payment of 500.00 into your child’s RESP. Extra payments of 100.00 a year will be made automatically for your children up to age 15 as long as you continue to receive the National Child Benefit supplement annually. The total Canada Learning Bond available for your child could amount to $2,000. You don’t have to contribute ANY money of your own to get this bond.
An additional $25 will be paid into the RESP with the first $500 bond to help cover the cost of opening an RESP (most banks do not charge for this service).
How do you get this bond for your child?
1)Have a SIN number for your child. Call 1 800 622-6232 for more info or visit a service Canada centre near you.
2)Apply through the Canada Revenue Agency for the Canada Child Tax Benefit Supplement – call 1 800 387-1193 for more info.
3)Open an RESP through a financial institution such as a bank or credit union and make sure your provider offers the Canada Learning Bond.
4)Ask your RESP provider to apply for the Canada Learning Bond on behalf of your child.
Need more info on all this?
Check out http://www.canlearn.ca