Whats the best way to set-up a college fund for kid??

jeffjones

jeffjones

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So I have been putting $50 aside from each cheque into a college fund bank account for my daughter.
I really don't want to keep it in her name as she gets older (still along time to go).
Whats the best place to put the money that would be protected but also a higher intrest rate then what she has now in her normal bank account.
Although stocks might seem like a good way with intrest I have no clue when it comes to them.
It will be there for about 15 more years, so the more intrest the better.

Cheers
 
Put it in an RESP. If your daughter doesn't use it for college/university, the funds go back to the contributor (minus taxes, I would imagine).
 
Not sure if it's still going on but when I set mine up at TD last year the feds dropped $1200 (500 per kids plus something extra) in an "elect us" bribe, or insensitive program just for setting it up.
 
We set this up for our sons years ago, if you put $2 000 they would give you $400 per year, got the statement in June and there was over $40 K per account. In 2007 they raised it to $500 per child if you put $2500 per year per child.

This is the simplest way for the average person to save for your children's education as the 20% fed contribution is money on the table that you should take.

A tax accountant can help you set up a more sophisticated plan involving Trust Accounts etc.


http://www.hrsdc.gc.ca/eng/learning/education_savings/public/resp.shtml
 
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resp

very few ways that you can get free money from the feds, and this is one of them.

(yes, i realize it's not truly free)
 
awesome, Thanks that looks like probably the way to go.
 
be aware of what your options are with the money that an resp can be used for...from what i understand, they will put in 20% up to $2000 by the holder, anything extra does not get the fed donation...as for what it can be used for, i believe it cannot be used as cash, or rent or living expenses...but i could be wrong, look it up...if they don't go to college and you want to withdraw the money, i believe the feds get their 20% back...but there are some folks on here with better knowledge than i, so do your homework...TFSA is something else to consider on the smaller scale of funds...at least it is cash at the end of the day...
 
Agreed RESP best option to go with...
 
GayManLoveIsOK said:
be aware of what your options are with the money that an resp can be used for...from what i understand, they will put in 20% up to $2000 by the holder, anything extra does not get the fed donation...as for what it can be used for, i believe it cannot be used as cash, or rent or living expenses...but i could be wrong, look it up...if they don't go to college and you want to withdraw the money, i believe the feds get their 20% back...but there are some folks on here with better knowledge than i, so do your homework...TFSA is something else to consider on the smaller scale of funds...at least it is cash at the end of the day...
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Yes the 20% thing I read something about but if it doesn't get used I believe it is a tax free transfer to put it to my RRSP's
 
jeffjones said:
Yes the 20% thing I read something about but if it doesn't get used I believe it is a tax free transfer to put it to my RRSP's
Click to expand...

not completely, the feds will want the federal top ups accounted for.
Be cautious who you set the RESP up with. Mine was with RBC securities and we had to apply to get cash released and supply reciepts for school expenses, they were a PITA. It was invested by RBC securities in mutual funds and fluctuated a bit.
When my last kid hit college I pulled all the funds and just put them into a savings account, I found out i could just request all funds be released (its your money) and its my responsibility to prove if ever audited where they went. RBC like to hold as much of your money as they can.
That rant over , the RESP is still your best bang for the buck
 
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