Education Savings

A post-secondary education is important in today's growing and evolving economy. With the cost of education continuing to climb, saving for a child's post-secondary education becomes an integral part of your savings and financial planning.

Registered Education Savings Plans (RESPs)

A Registered Education Savings Plan or RESP is a good education savings vehicle available to children under 18. It is a plan registered by the government and the benefits of saving in an RESP are two-fold.

First, any interest that you earn in the plan is tax-deferred and is only taxed when your child/beneficiary begins to use the monies accumulated in the fund. The earnings are then taxable in their hands, generally at a much lower rate.

Second, the Government of Canada contributes to your plan through the Canada Education Savings Grant (CESG) every year that you contribute. The CESG program allows eligible RESP beneficiaries to receive grant monies based on the annual contributions paid into the plan.

• Annual CESG maximum: $500 per beneficiary
• Lifetime CESG maximum: $7,200 per beneficiary

In March of 2007, the following changes impacted RESP:

• Lifetime contribution limit increased from $42,000 to $50,000
• $4,000 annual contribution limit was eliminated
• Basic CESG increased from 20% on the first $2,000 contributions to 20% on the first $2,500 contributions

You can learn more about RESPs in the Learning Centre under Go Figure and Other Information, or talk to a Member Consultant today about how to take advantage of these options and invest in the future of your child.

Options for Financing an Education

FirstOntario has designed a student loan with the features and advantages that student Members need and want. Check out how a FirstOntario student loan can help your reach graduation day.

You can also consider using the equity in your home to help finance continuing education. You've worked hard to build up the value and equity in your home and now you can use that to your advantage. A FirstOntario MERITLINE line of credit offers flexibility that allows you to draw on your credit line at any time and conveniently pay just the interest on any outstanding monthly balances if you wish. There's no penalty to pay off the balance in full - whenever you want. You can learn more about MERITLINES and how they can work for you, by clicking here.