As university and college costs increase, the Universal Child Care Benefit (UCCB) can be an important tool to help you save for your child’s education. To maximize the $100 benefit, consider contributing the money to a Registered Education Savings Plan (RESP) in your child’s name, and the money has the opportunity to grow tax deferred. If used to generate the Canada Education Savings Grant (CESG) this would add an additional $20 towards your education savings. This means you’ll receive $120 each month from the government to help pay for your child’s education.
An RESP offers the potential to accumulate more in education savings than what the UCCB can provide during your child's first six years. You can contribute up to a lifetime maximum of $50,000. The contributions you make each year to the RESP could generate between $500 and $600 a year in CESG funds, depending on your family income and child’s age. The lifetime CESG grant available per beneficiary is $7,200.
Remember, the more money you save and invest for education, the more control you and your child will have over how to pay for education. Talk to your Edward Jones advisor today for more information.