Once you have opened a respect for your (grand) child or (grand) children, what should you do with it?
How often and how much to contribute to a respect
Ideally, you must contribute at least $ 2,500 per year if possible. A respect can remain open for up to 35 years, giving you enough time to contribute to the maximum of $ 50,000. An important date to be aware of your contributions is December 31 of each year. At the end of December the government marks the deadline, especially for the Canada Education Savings Grant (CESG). This subsidy corresponds to 20% of your first $ 2,500 in contributions per year, up to $ 500, up to a lifelong maximum of $ 7,200 per child. (To get the full $ 7,200, you must strategically contribute $ 36,000.)
The CESG is available until the end of the calendar year that your child turns 17. But beware: you can only overtake the CESG one year at a time, for a maximum subsidy of $ 1,000 in a certain year. That is why it is best to contribute early, often and to adhere to a schedule.
Read more about the respect of the government and the deadline of the respect.
What investments can you make in ASP?
You can save deposits and cash in a respect, but it is unlikely that the value keeps pace with inflation over time. Many families invest in the account, so that the money has the potential to grow. A respon can hold:
This type of assets have different levels of risk and potential reward. Bonds and GICs are guaranteed to return, while investment funds, ETFs, shares and options depend on the performance of financial markets. It is important to opt for investments that match the needs and the situation of your family, including your time horizon (how long it takes for your child to go to university, university or trading school) and risk tolerance (your comfort level with investment volatility). The respect of your child should not move at night.
A response expert can help you choose investments
Maybe you are very good at saving, but you are new to investing. You can rely on respect experts, such as those at ContractFor help. Abark’s student plan uses a Glide Path Investment Strategy that automatically adapts to build savings when your child is young before you invest more conservently closer to your recording period, so that you have as much financing as possible when you need it.