RESP

Savings for your children?

What do you look for when you are saving for your children? Reasonable interest and money accessibility is what most people are looking for, although today this is not easy in Canada. Not too many banks are offering Savings accounts for children and those who are offering it, have fees, minimum balances or miserable interest rates.

You can open a RESP (Registered Education Savings Plan). If you want to withdraw money from a RESP the Grant is repaid to the government.

I contribute 500$-2500$ in a RESP annually to get most of the Canada Education Savings Grant.

Here are some RESP options:
- Meridian Credit Union - RESP Account 1.75%
- Laurentian Bank - Cash Account 1.25% (over $5000)
- Royal Bank (no annual fee, very low interest for savings and GIC but gives access online to mutual funds).
- First Ontario Credit Union (GIC RESP 1.90%).

Additionally, I opened a Children’s Savings Account with Tangerine Canada where I save money for my children. And the interest is over the market’s average.
You can open a Children’s Savings Account (Tangerine Canada) in two easy steps and get $50 Bonus:

1. Open a Tangerine Savings Account or TFSA for yourself using the Orange Key 48209770S1 with a initial deposit of $100 in order to get the $50 Bonus. To open an account go to: http://www.tangerine.ca/en/saving/savings-accounts/index.html
2. Once enrolled, you can open a Children’s Savings Account for your child. Both you and your child can have access to the account, but you can decide what transactions your child is permitted to initiate and $ limits. Periodically Tangerine offers $ Bonuses to open an Children's Savings Account for your child. Don’t forget to use the Orange Key 48209770S1 to get the bonus. 

Get your child off to a good start and teach them how to save with:

• NO fees
• NO service charges
• NO minimum balance

Your child will get a personal Client Number, PIN and password. They will be able to manage their own money with easy, convenient account access 24/7 online or by phone – under your watchful eye of course. As they learn when to save and when (and how much) to spend, you can manage the account preferences and options to suit their age and level of responsibility.
By starting to save today, your child will get hands-on experience in making responsible decisions about how to save. Open a Children’s Savings Account for your son or daughter today. It’s easy!

More about RESP’s
Here are some RESP options:
- Meridian Credit Union - RESP Account 1.75%
- Laurentian Bank - Cash Account 1.25% (over $5000)
- Royal Bank (no annual fee, very low interest for savings and GIC but gives you access online to mutual funds).
- First Ontario Credit Union (GIC RESP 1.90%).

How much Canada Education Savings Grant money can I get?

On the first $500 you save in your child’s RESP, the Canada Education Savings Grant will give you:

• up to $200 if your net family income is $45,282 or less;
• up to $150 if your net family income is between $45,282 and $90,563;
• up to $100 if your net family income is more than $90,563.

Net family income limits are updated every year. This example is based on 2016 income levels.
When you save more than $500 annually, the Canada Education Savings Grant could add up to $400 on the next $2,000 saved.

What is the maximum Canada Education Savings Grant my child can receive?

• Between $500 and $600 per year; and
• $7,200 total lifetime grant.

What is the Canada Learning Bond (CLB)?

The Canada Learning Bond is $500 offered by the Government of Canada to help you start saving now for your child’s education after high school. Plus, your child could get $100 every year until he or she turns 15 years old to a maximum of $2,000!
This money can be used to pay for full-time or part-time studies in:

• apprenticeship programs;
• CEGEPs;
• colleges;
• trade schools; or
• universities.

Is my child eligible for the Canada Learning Bond?

Your child is eligible to receive the Canada Learning Bond if:

• he or she was born after December 31, 2003; and
• you receive the National Child Benefit Supplement under the Canada Child Tax Benefit (also known as the family allowance).

CESG grant room (carry forward)

As of 1998, grant room (unused basic CESG amounts) accumulates until the end of the year in which the child turns 17 even if he or she is not a beneficiary of an RESP. Unused basic CESG amounts for the current year are carried forward for possible use in future years, provided the beneficiary remains eligible.

Annual maximum amounts that could be paid per beneficiary

	Time period	Description	Amount
RESP Contribution Limits	1998 to 2006	N/A	$4,000
	2007 or later	N/A	No annual limit
Basic CESG	1998 to 2006	Annual amount added to grant room	$400
		Basic CESG annual limit	$800
	2007 or later	Annual amount added to grant room	$500
		Basic CESG annual limit	$1,000
Additional CESG	2005 or later	Yearly maximum Additional CESG (10% or 20% on the first $500 contributed)	+ $50 or + $100
Total CESG (Basic + Additional)	2005 to 2006	Yearly maximum payable with carry forward	$900
	2007 or later	Yearly maximum payable with carry forward	$1,100

Yearly and lifetime RESP contribution limits

From 1998 (the first year the program started) to 2006, inclusive:

• annual contribution limit: $4,000;
• lifetime contribution limit: $42,000 (including any contributions made prior to 1998).

From 2007 to present:

• no annual contribution limit;
• lifetime contribution limit: $50,000 (including all contributions made prior to 1998).

While there are currently no annual contribution limits, you can receive the Canada Education Savings Grant (CESG) only on the first $2,500 in contributions per year, or up to the first $5,000 in contributions, if sufficient carry forward room exists. Any contributions over and above these amounts will not receive any CESG for the current year or any subsequent years. All contributions exceeding $50,000 limit will not attract any grant even if the maximum $7,200 of grant is not reached.

For more information go to:
https://www.canada.ca/en/employment-social-development/services/student-financial-aid/education-savings/resp/info.html#carry_forward

https://www.canada.ca/en/employment-social-development/services/student-financial-aid/student-loan/student-grants/cesg.html