What alternative to RESPs do you have available
The most lucrative way to save for your child’s education is through RESPs. You can avail government grant amounting to $7,200 which isn’t a small amount. But if you want to explore beyond Knowledge First Financial and similar RESPs, you will find that there are quite a few options available to you.
Non registered account
Non registered accounts are very easy to set up, they are not complicated at all. You can access the money anytime you want and even after your child has reached adulthood, you will still control the account and the money in it. The fact that you can take out the money at anytime without any questions asked is a two edged sword. On one side you can withdraw the money in an emergency. On the other hand though you have kept the money for your child’s education, you might be tempted to withdraw the money whenever you are a little short on funds. Remember though, you will have to pay tax on the savings as well as any interest you get.
Open up a tax service account for your child
This account is not much different than the non registered account. There are no restrictions with withdrawals. On the plus side, you will not have to pay any taxes on the money kept in the account. It is very similar to Knowledge First Financial and similar RESPs without the government contribution though.
Set up a trust fund for your child
Setting up a trust fund is a bit complicated; here you can transfer a certain amount of money to your child. This process is not like opening an account, it’s more like creating a legal agreement where money is transferred. This is a really good way to manage funds, and you can rest assured that the money will be used for exactly the purpose it is meant for, i.e. if you leave the money for the purpose of your child’s education then that is the only way it can be used. You will have to hire a lawyer to get the wording of the legal document right. The terms and conditions will have to be followed to the letter, so there shouldn’t be any loophole in the document.