REGISTERED EDUCATION SAVINGS PLAN

An excellent savings plan to consider for the future education needs of our children, grandchildren or great-grandchildren is the Registered Education Savings Plan (RESP) because the government adds 20% per cent to it each year. A total of $2,500.00 per child is available for each subscriber every year. When the student is ready for higher education these funds can be accessed. RESPs were not available in my time (in the l940s) and my tuition funds ran out during the fourth year.

Let’s say two of my great-grandchildren are ready for college and I have a total sum available of $30,000.00. But if I had waited until they were about to enter college without realizing I could have added 20 % from the government’s addition that would have made a major difference.

Even so, calculating the $30,000.00 at 04% for two subscribers (the average interest paid on term deposits just before the present depression) there would have been a balance on hand to for the next three years for both subscribers. But thanks to the parents, grandparents or great-grandparents, up to a total of $72,000 can be realized for each subscriber until their age of 17 years. No doubt many of these students call their mentor and say, “Thanks for your investment in our first year of college, we appreciate your sacrifice in letting us absorb the interest you would have received if the principal has been left in your funds. Let us know when you feel like celebrating and we’ll have a picnic together. I know you love picnics.” Yesterday the CBC interviewed a doctor who had just completed her advanced degrees required in geriatrics. She still owed $179,000.00 on her student’s loan. She is willing to work anywhere needed, including northern Canada. For complete details: www.royalbank.com or any other bank of your choice.