There are many ways to save for a child's or grandchild's education. It can be as simple as opening a savings account, or buying some Canada Savings Bonds. Another option is to set up a formal plan, such as a Registered Education Savings Plan (RESP).
One thing is sure: If you'll be saving for many years, you will need a way of saving that you can live with for a long time.
What should I ask before I choose a savings plan?
- Are there rules about how much I can save each year?
- When do I contribute?
- Who will invest my money?
- How fast will my money grow?
- How much will this plan cost?
- What happens if my plans change?
For example, what if you need the money for something else and you have to leave the plan after a year or two? What if your child never goes to college? With some savings plans, you may not get all your money back if this happens. Others are less strict.
That's why it's important to choose the way you'll save with care, and make sure you understand the rules. You don't want to find out later about a rule that may cost you money.
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Six things to ask before you choose an education savings plan
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.