Could an RESP be the best Christmas gift?
The holidays are almost here and you’re already running out of gift ideas? On top of that, your family is asking what they could buy for the children? Make the choice to invest in their future with the gift of a Registered Education Savings Plan (RESP).
Giving education savings is a little like offering knowledge and helping to build the society of tomorrow. Imagine a young person pursuing a career driven by their passion, not financial constraint. Does that remind you of anyone? Here are three good reasons to give the gift of an RESP this year
1. Encourage young people to continue their studies
First, education savings is a good way to motivate young people to pursue post-secondary education. Not only does this financial security reduce the stress of tuition costs, but it also allows young people to focus more on their learning. This sends a clear message that their ambitions are achievable and backed by a concrete safety net.
Indeed, the pursuit of post-secondary education and financial health are closely linked. 2. Give a meaningful gift that reflects your values1 among Canada Education Savings Grant (CESG) beneficiaries than among non-beneficiaries. In fact, grant beneficiaries are 10%1 more likely to obtain a post-secondary diploma within five years of enrolment.
2. Give a meaningful gift that reflects your values
Second, giving an RESP as a gift is an opportunity to show young people that their happiness and future are important. It’s a gesture that shows you can prepare for life’s big moments and opens the discussion on savings and education (if your little one is old enough to understand!).
Can you open an RESP for a teenager? Absolutely. Learn more in our article “A new RESP... for my teen!” .
That said, it’s normal to be torn between spoiling your child and giving them a more meaningful present. Well, there’s a way to do both! There’s nothing to stop you saving a portion of your budget for an educational toy, a book or any other Christmas gift that will help your child learn and grow while having fun.
3. Make your gift grow over time
Third, remember that RESPs increase in value year after year, unlike toys that wear out or gadgets that become obsolete. With the generous government grants that accumulate and the magic of compound returns, your gift will be even more valuable when the child needs it. With the grants alone, your beneficiary could receive up to $12,8002 thanks to your investment. Sounds interesting, doesn’t it?
Find out in seconds how much an RESP could earn you with the free calculator.
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Giving the gift of an RESP: how does it work?
First of all, you can be a grandparent, godparent, uncle, aunt or close relative and open an RESP for a child you care about. In all cases, there are two contribution options:
- One-time contribution: you can choose to make a one-time contribution with no future commitment.
- Monthly contribution: you can choose to contribute a set amount each month.
In reality, it all depends on your budget and how you wish to contribute to your beneficiary’s future. The beauty of Kaleido’s individual RESPs is that you can add a new amount whenever you want, or change your monthly payment to suit your needs.
What if you’re not the child’s parent?
Just be aware that when you open the account, you will need to provide certain information about your beneficiary, such as their date of birth and social insurance number (SIN), in addition to the contact details of the person responsible for them. The latter is usually the parent receiving the Canada child benefit (CCB).
For example, if you are a grandparent and wish to contribute to your grandchildren’s education—without having to open an account for each of them—you can also offer a gift certificate to the parents and let them manage the rest themselves.
- Gift certificates: if the beneficiaries already have an RESP with Kaleido, the parents can simply add the gift certificate to their RESP. Otherwise, they can open an account and select the contribution option3 of their choice.
This Christmas, instead of a present that ends up buried in a closet, give something that will grow with the child. Education savings is a gift that lasts a lifetime: it prepares for the future, supports dreams and grows over time. Opening an RESP is quick and easy and can become the most precious gift a young person will receive this year. Help them prepare starting today!
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