Saving for post-secondary education

Getting started
You know you should save, you're ready to save -- now, where do you put your money? The many options available can be most easily broken down into registered or nonregistered savings plans.

Registered savings
Registered Education Savings Plans, or RESPs, already account for a substantial percentage of educational savings in Canada, and that share is growing all the time. The following benefits offered by RESPs make them hard to turn down:

• Free money. The federal government matches contributions you make through the Canada Educations Savings Grant and helps modest-income families get started saving with the Canada Learning Bond. Albertans are eligible for even more money from the Alberta Centennial Education Savings Plan.

• Less taxes. RESP contributions grow tax-free. Because money paid out of an RESP is taxed in the hands of the student and many students have little or no income, withdrawals are often tax-free, too.

• Flexibility. Even if your child doesn't immediately attend university or college, you still have several options for accumulated RESP contributions. You can wait and see if he changes his mind; you can use the money to send a brother or sister to school; you can transfer the money to an RRSP to maintain its tax-protected status; or, if all else fails, you can withdraw your money (although government contributions will likely have to be returned).

You'll find detailed answers to your RESP questions and a list of RESP providers on the Government of Canada's website.