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Nancy Woods, adviser with RBCDeborah Baic/The Globe and Mail

Dear Nancy Woods,

I have just received an inheritance and was wondering the best approach to building an RESP for my two-year-old. I also have a 14-year-old who has just started grade 9. We do not have an RESP for her, but we do have around $60,000 to invest towards her education. Does it make any sense at this point to start an RESP or is there something else we should do

Thanks so much, Jennifer

Hi Jennifer,

You can consider opening up a family RESP and naming both children as beneficiaries. This will allow you to access either one or both of them for their post secondary education. This can be a benefit in the case that one of them decides not to continue their education past high school. There are many options for the contribution.

1)  You can put in a lump sum and claim back for only one additional year of the Canada Education Savings Grant (CESG), plus the current year, for the 14-year-old and the 2-year-old.  If you contribute new funds each year, you can claim back again for a past year until you have caught up. The CESG grant is $500 per child per year.

2)  You can contribute $5,000 for each child, each year, and get the $500 for each child. You can catch up the 14-year-old until he or she turns 18. It is very important that you have made a minimum $2,000 lump sum prior to her turning 16 in order to qualify to put in for ages 16 and 17.

For example, you may contribute $2,500 for this year and $2,500 for a previous year, for a total of $5,000. You will then be entitled to receive a grant of $1,000. Any contribution above the $5,000 will not be paid any additional grant money. Also note that the contribution limit was only $2,000 prior to 2007.

3)  You can always contribute the lump sum and forfeit some of the CESG, some for the 14-year-old, and most for the 2-year-old.

There are many combinations and permutations that can be done for the contributions.  There is also the issue of how to invest the funds.  It is best to seek the advice of a professional to guide you and help keep track of CESG claims.


Nancy Woods, CIM, FCSI is an associate portfolio manager and investment adviser with RBC Dominion Securities Inc.  To register your interest for an upcoming seminar, "What are the Questions Your Advisor is NOT Asking You?" visit her website To ask her a question, send an e-mail to