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A Registered Education Savings Plan (RESP) is the ideal way to save for your child’s education. RESPs permit savings to grow tax-free until the beneficiary is ready to go full-time to college, university, or any other eligible post-secondary educational institution.
There are three possible government grants you may be eligible for, which in addition to great tax benefits, helps to make it a little bit easier to fund the cost of an education.
BC Training & Education Savings Grant and Canada Learning Bond
Families in B.C. can receive up to $3,200 free government money for their child’s education without contributing a cent. Every child in B.C. can get the $1,200 B.C. Training & Education Savings Grant (BCTESG) at age 6, 7 or 8. Kids in B.C. also have free money, up to $2000, waiting to get their post-secondary education savings started through the federal government’s Canada Learning Bond. That’s a total of up to $3,200 per child!
Canada Education Savings Grant (CESG)
The Canada Education Savings Grant is a grant that adds 20% to the first $2,500 of annual RESP contributions. This means that the RESP can collect an extra $500 a year (up to a lifetime maximum of $7,200 per beneficiary) towards a child's education. No matter what your net family income is, when you save more than $500, the grant will give you 20 cents for every extra dollar, up to $2,500.
Yes, it’s FREE MONEY for families to get savings started, even when they have no money of their own to contribute.
You only need to set up an RESP account to apply and receive the money. Without an RESP, kids miss out on the federal and provincial education savings incentives they are entitled to receive from the government.