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How Maria and Gregor saved $15,000

  • They open a Registered Education Savings Plan (RESP) for Hayley right after she is born. The government gives them a $500 Canada Learning Bond (CLB). They also get another $100 each year for up to 15 years.
  • They put $20 into Hayley’s RESP each month until she turns 18. The Canada Education Savings Grant (CESG) adds $96 to Hayley’s RESP – 40¢ for every dollar they save.
  • If their RESP earns 5% interest each year, they will have more than $15,000 to help pay for her education.
Hayley will have even more money for her education if her parents increase their contributions. Her grandparents and relatives can also put money into her RESP.
 
2005
 
Canada Learning Bond (one time payment)
$500
Canada Learning Bond ($100/year)
$100
Savings ($20/month)
$240
Canada Education Savings Grant (40% of $240)
 
$96
2005 Total
$996
 
 
2006 – 2022
 
Savings ($240/year)
$4,080
CESG ($96/year) $1,632
CLB ($100/yr for 14 years)
$1,400
5% compound interest
$4,692
Total savings
$15,276
 
 

How Bindu and Gini saved $19,000

  • They open a Registered Education Savings Plan (RESP) for Bina when she is 3 years old.
  • They put $60 into Bina’s RESP every month until she reaches age 18. That adds up to $720 each year.
  • Because they make more than $74,357 they earn a Canada Education Savings Grant (CESG) of $144 a year. That’s 20¢ for every dollar they save.
  • If their RESP earns 5% interest each year, they will have more than $19,000 to help pay for Bina’s education.
Bina will have even more money for her education if her parents increase their contributions. Her grandparents and relatives can also put money into her RESP.
 
Each year
 
Savings ($60/month)
$720
Canada Education Savings Grant (20% of $720)
 
$144
Total 
$864
 
 
Over 15 years
 
Savings ($720/year)
$10,800
CESG ($144/year)
$2,160
5% compound interest
$6,616
Total savings
$19,576