Saving for Your Child’s Future with an RBC RESP

When we were expecting parents planning for the birth of our first daughter, one of the to-do items on the top of our list was saving for her post-secondary education. At the time it felt odd to be planning for something so far in the future but we knew that it was easier to start as early as possible then to try and play catch up later. Little did we know how easy it all would be after we dropped in to our local branch to talk about an RBC RESP.

RBC RESP Savings Tip

photo credits to Carly Jane1 on FlickrMost of us receive a monthly installment into our account for Canada Child Tax Benefit (CCTB) and Universal Child Care Benefit (UCCB). These benefits go until a child is six years old and is meant to assist parents on a monthly basis in the care of their children. For us, it came to about $100 per month. We planned our budget as though those benefits didn’t exist and never thought about including them to pay our bills. Instead, the day after those deposits went in, we had $100 come out through an RESP-matic as our monthly deposit into our RESP.

So for the first six years of your child’s life, you can have the government payments make your deposits for you. In addition to putting these benefits right into your RESP, the Canada Education Savings Grant will match up to 20% on the first $2,500 contributed annually (up to $500 a year, up to a lifetime maximum of $7,200).

In 2011, when our second daughter was born, we went in and added her to the RESP account. With an increase in the benefits listed above because of two children, we doubled our contribution.

Note: In addition to the Canada Education Savings Grant, you may be eligible for a provincial grant. This varies from province to province. In Alberta, the program is currently under review, so if you are thinking about getting your RESP set up, do it now to at least be eligible for the $500 deposit made at the beginning as every little bit helps.

The staff at the Royal Bank helped answer all of our questions and set up our RESPs and we couldn’t be happier. Now, everything just goes in and comes out of our account automatically and our ‘out of sight, out of mind’ approach will see us pass $13,000 in savings for education next month.

The best part is that if your child decides not to go to any recognized education after high school, then you still get the money that you put in back, but there are some limitations (eg. there is a limit on how much of it you can transfer into an RRSP, the rest will be declared as income). The monies that were contributed from the government would be paid back to the government. NOTE: this does NOT include the ‘benefits’ I listed above as those were meant as payments to you in the first place.

If you have any questions, your local RBC branch will be able to help answer them. Even if you are not sure if you are eligible or can afford to start an RESP, still drop by and talk with a financial professional as there are some additional benefits for low income families that they will know about.

Disclosure: I am part of the RBC RESP blogger program with Mom Central Canada and I receive special perks as part of my affiliation with this group. The opinions on this blog are my own.

Sheri Landry

Sheri publishes, and writes at This Bird’s Day where she shares all of the thoughts in her head without the voices. Sticking mainly with content for Canadians, Sheri shares family stories, product information and anything that fits into her (and her family’s) daily activities.

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2 comments… add one
  • Betty Sep 10, 2013, 9:08 pm

    You are very smart to start early in life. In no time at all your girls will be on to higher education and and you will be glad you put that money away. Way to go! Very informative blog.

    • Sheri Landry Sheri Landry Sep 10, 2013, 10:57 pm

      Thanks Betty. I have to say that I am happy now that we started it 5 years ago.

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