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Education Savings: Are You Leaving Money on the Table?

Written by: Universitas

February 24, 2016

When you get a visit from the stork, you immediately imagine a happy promising future for your rosy-cheeked angel. All new parents know in their hearts that their child is destined for great things and a successful career. However, few actually plan for this future, which will most likely require a post-secondary diploma. And yet, the key to education savings is an early start, and investing in a registered education savings plan (RESP) entitles baby to substantial government grants! Parents will thus maximize their returns and see their initiative rewarded as cash payments for their child in the future.

A solution that pays off for new parents

Most financial advisors agree that when it comes to education savings, the best investment out there for families with young children is the RESP! Thanks to the Canada Education Savings Grant (CESG) and the Quebec Education Savings Incentive (QESI), contributions made to RESPs are automatically increased by 30%1. For families in Quebec of modest means, the grants could mean up to $12,800 per child. The RESP thus represents a very interesting option to finance a child’s post-secondary education.

Advantages too few know about

Despite its benefits, a recent survey2 commissioned by Universitas found that 49% of families in Quebec don’t know about the government grants offered to encourage education savings. This would certainly explain why a number of families don’t intend to prioritize the RESP as part of their investment strategy: unknown advantages aren’t the best of incentives!
You don’t have to be wealthy to set up an RESP. The earlier you start, the more your contributions (as small as these may be) will have time to earn income. Low-income families can even set up an RESP for their child to receive the Canada Learning Bond (CLB), and never have to make a single contribution to the plan. All they have to do is open a plan to receive this grant3.
Moreover, in addition to allowing children to access grants, the RESP is also an excellent way for parents to add to their own nest egg. Later on, when the child pursues post-secondary studies and receives educational assistance payments, the subscriber will also receive a refund of contributions4, tax free! He or she can then choose to reinvest this sum in an RRSP or TFSA for which contribution room has accumulated over the years.

Beyond the savings, there’s motivation

Deciding to set up an RESP is also choosing to encourage a child to persevere academically. By investing in a group RESP, the subscriber commits to a long-term investment, thus confirming and emphasizing the importance of the beneficiary’s future education. For many children, the conviction they will have financial support to pursue a post-secondary education becomes an additional motivating factor when reflecting on their prospects.
In light of all these advantages, the RESP is definitely a smart investment all families should consider when planning their savings strategy. This kind of money should not be left on the table.


1. On the first $2,500 contributed annually.
2. Complete survey results available at www.universitas.ca/en/news
3. Certain conditions apply; refer to our prospectus.
4. The refund of contributions at plan maturity includes the sales charges of $200 per unit under the REEEFLEX Plan, whereas under the INDIVIDUAL Plan, the sales charge of up to $200 is not refunded. Certain conditions apply

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