TORONTO, ONTARIO — (Marketwire) — 09/03/11 — Whether they go by Grandma, Grand-pere, Bubbie, Naniji, Nonno, Abuela or YehYeh, Canadian grandparents have at least one thing in common – they love to spoil their grandchildren!
According to a study from BMO Financial Group (BMO), grandparents give, on average, $100 or less annually to each of their grandkids. Why not invest in their future by giving the gift of an education through a contribution to your grandchild-s Registered Education Savings Plan (RESP)?
An increasing number of Canadians are contributing to RESPs; according to Statistics Canada, RESP assets grew to $25.9 billion by the end of 2009.
Opening an RESP for a child is getting increasingly critical as the costs of post-secondary education rise. Currently, a four-year degree can cost as much as $60,000. Given current trends, some sources estimate that a child born in 2011 can expect to pay as much as $140,000 for their degree when they enter college or university.
“Contributing even small amounts to an RESP can go a long way in saving for a post-secondary education,” said Mark Stewart, Director, Product Development & Management, BMO Investments Inc.(i) “While most grandkids receive a few small cash gifts a year, these amounts, if invested in an RESP, will grow over time through compounding interest and the funds provided by the federal government-s Canada Education Savings Grant.”
Grandparents- How much of a difference can $100 a year to your grandchildren-s RESPs make?
According to BMO, more than 70 per cent of Canadians give their grandkids, nephews/nieces or Godchildren $100 or less in monetary gifts per year.
If each set of grandparents gives the gift of $100 per year to their grandchild-s RESP, by the time the child turns 17 years old, he/she could have up to $11,000 saved for a post-secondary education. This takes into consideration the federal government-s Canada Education Savings Grant.
Interested in starting or contributing to an RESP for your grandchild? Here is some advice to get you started:
(i)BMO Investments Inc. is a financial services firm and a separate legal entity from the Bank of Montreal
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly-diversified North American financial services organization. With total assets of $477 billion as at July 31, 2011, and more than 47,000 employees, BMO Financial Group provides a broad range of retail banking, wealth management and investment banking products and solutions.
Contacts:
Amanda Robinson, Toronto
416-867-3996
Sarah Bensadoun, Montreal
514-877-8224
Laurie Grant, Vancouver
604-665-7596