Building Your Child’s University Fund: A Complete Guide to Canadian Education Savings.
can give your child a strong financial start. Whether your little one is just learning to walk or
already in high school, it’s never too early—or too late—to start saving for their education.
In Canada, parents have access to powerful savings tools that can make post-secondary education
more affordable. In this guide, we’ll break down how to build your child’s university fund step
by step.
1. Why Start Saving for Your Child’s Education Now?
The cost of post-secondary education in Canada is rising. On average, tuition alone can cost between $7,000 and $10,000 per year, not including books, housing, and other expenses. By starting early, you can:
- Reduce reliance on student loans.
- Benefit from compound growth (your money grows over time)
- Maximize government grants and incentives.
Even small, consistent contributions can make a big impact over time.
2. The Best Way to Save: Registered Education Savings Plan (RESP)
A Registered Education Savings Plan (RESP) is the most effective tool for building your child’s education fund. Here’s why:
- Tax-Free Growth: Your investments grow tax-free inside the RESP.
- Government Grants: The government matches 20% of your contributions (up to $500 per year) through the Canada Education Savings Grant (CESG).
- Flexibility: Your child can use the funds for university, college, trade school, or even certain programs abroad.
How to Open an RESP:
1 . Choose a provider (bank, credit union, or investment firm).
2 . Provide your child’s Social Insurance Number (SIN).
3 . Start contributing—there’s no minimum amount required!
3. How Government Grants Can Boost Your Savings
The government offers several free money programs to help families save for education:
- Canada Education Savings Grant (CESG) – Matches 20% of annual contributions, up to $500 per year (lifetime max of $7,200).
- Additional CESG – Low-income families can receive up to 40% in matching contributions.
- Canada Learning Bond (CLB) – If your family qualifies, you can get up to $2,000 free from the government—without making any contributions!
Pro Tip: Even if you can’t save much, open an RESP early so you don’t miss out on these grants!
4. How Much Should You Save?
The amount you save depends on your budget and goals. Here’s a simple strategy:
The 1-2-3 Rule:
-
- $1 per day ($3 0/month) → $1 2 ,000+ by the time they turn 1 8
-
- $2 per day ($60/month) → $2 4,000+
-
- $3 per day ($90/month) → $3 6,000+
Even if you can’t contribute regularly, one-time deposits and gifts from family members can grow significantly over time.
5. Where Should You Invest Your RESP?
Simply opening an RESP isn’t enough—you need to invest it wisely. Some common options include:
- High-Interest Savings Account (Safe, but low growth)
- GICs (Guaranteed Income Certificates—secure, but limited returns)
- Mutual Funds & ETFs (Higher growth potential, ideal for long-term savings)
If your child is young, consider a growth-focused portfolio (stocks, ETFs). As they get closer to university, shift to lower-risk investments to protect their savings.
6. What If Your Child Doesn’t Go to University?
No worries! If your child chooses a different path, you have options:
Transfer funds to a sibling’s RESP
Withdraw your contributions tax-free
Move up to $50,000 into your RRSP (if you have room)
Withdraw earnings (they’ll be taxed, but at a lower rate if your child is the recipient)
7. Final Tips for Stress-Free Education Savings
Start early – Even $10/month is better than nothing!
Maximize government grants – Don’t leave free money on the table.
Encourage family contributions – Ask grandparents and relatives to contribute as birthday gifts.
Review your RESP annually – Adjust contributions and investments as needed.
Final Thoughts: Give Your Child the Gift of a Debt-Free Education
Saving for your child’s education is one of the best financial decisions you can make. With an RESP and smart planning, you can help them graduate without the burden of student loans.
Start today—your future self (and your child) will thank you!
Have questions about RESP or other ways to save for education?
Book a Free Education Savings Consultation
