3

I recently had a baby and am thinking about opening an RESP to save for his education. Is this the best way to invest my money? Is there a chance of losing money this way?

5

Dazed, an RESP is a type of account. Within the RESP, you can have cash, investments or even savings vehicles like GICs etc. So depending on where you put the money within the RESP, yes, there is a chance of losing money.

If you think your children will attend post secondary education, I don't think that there is a better way to save. The government will match 20% of your contribution, up to a maximum grant of $500 per year.

To take advantage of the grant, we contribute $2500 per year to obtain the maximum $500 grant.

Hope this helps!

  • what a great answer- thank you for the information! – DazedandConfused Nov 16 '09 at 19:46
  • Can I contribute for prior years and get the matching grant? For example, if a child is 4, can I contribute for $2,500 for this year, $7,500 for the previous three years and get 4 matching grants equaling $2,000? – Burnsstein Jan 23 '11 at 15:02
  • Another follow-up question: does the "annual contribution" have to be made between January 1 and December 31, or do I have until March 1, 2011 to contribute for 2010 as with RRSP? – Burnsstein Jan 23 '11 at 15:03

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