Education Planning

Most of us want our children and grandchildren to experience the best of what life has to
offer - including a good education.

However, as university and college tuition costs spiral upwards, it's becoming more difficult than ever before to finance post-secondary education.

That's why it's essential to start planning as early as possible. Developing a savings strategy before your children begin their post-secondary education gives you the power of time - the earlier you begin to save, the more your savings will work for you.

Registered Education Savings Plans (RESPs) are one of the most effective ways to save today for your children's future education costs. An RESP is a registered plan to which you contribute on behalf of a named beneficiary, usually a child or grandchild. As the subscriber, you don't receive a tax receipt for the contributions you make, but the funds grow tax-free in the plan until the beneficiary enters a post-secondary institution such as a college, university or technical institute on a full-time basis. You can make RESP contributions of up to $4,000 per year per beneficiary, for a lifetime total of $42,000 per beneficiary.

Once your beneficiary starts college or university, he or she begins receiving payments from the investment income generated by the contributions and will be taxed on those amounts. The advantage of this scenario is that a student usually falls within the lowest tax bracket, so that the tax payable is minimized. The information contained on this website is for use by persons resident in Canada only.

Canada Education Savings Grant

For many years, the primary attraction of RESP investing was the ability to enjoy tax-free earnings, and the opportunity to pay out those earnings to students who tended to be in lower tax brackets. However, in 1998, the federal government made investing in an RESP even more attractive with the introduction of the Canada Education Savings Grant (CESG).

Through the CESG, the government pays an additional 20% on the first $2,000 you contribute to your plan, to a maximum of $400 annually per beneficiary under the age of 18. For example, on a $1,000 RESP contribution, you would receive a $200 CESG that goes directly into your RESP and can be invested along with contributions. The lifetime maximum CESG per beneficiary is $7,200.

In addition to being enrolled in a post-secondary institution on a full-time basis, beneficiaries must have a social insurance number (SIN). Beneficiaries aged 16 and 17 must also meet certain qualifying criteria. The information contained on this website is for use by persons resident in Canada only.

RESP Plan Features

A ScotiaMcLeod Full-Service RESP offers you many different benefits. Through one of our full-service self-directed plans, you can:

• Tap into the experienced, objective expertise of your ScotiaMcLeod Investment Advisor.
• Access the widest range of investment options for your RESP, including mutual funds, equities, and fixed income products like bonds, coupons and GICs.
• Learn from objective research and analysis of investment alternatives.
• Contribute other investments "in kind" to your RESP.
• Choose between a family or individual plan.
• Take advantage of the benefits of 100% foreign content.
• Receive monthly or quarterly statements detailing the activity in your account.
• Rely on the security of ScotiaMcLeod, a member of the Scotiabank Group.

The information contained on this website is for use by persons resident in Canada only