eeucailon Savings Grant is free me

Doug Smith

Contributing Weiter

IT’S not often the gov- ernment gives away money but that’s exactly what the new Canadian Education Savings Grant is — free money.

Vie teds are orfering a S400 gtant to parents, grandparents or great grandparents investing Qoininimum of $2,000 tna Registered Education Savings Pian (RESP),

RESP’s have been areund for awhile as ameans of shelter- ing income carned to fund a child’s education. The money you put in won't give vou a tay dedhiction. Bur the money the investment earns is only taxed when it is taken out

Presumably, the student benetigiary wii have Htle or ne income while in school and will be raved avcordir ino mane cases. no ingeme tan will be paid on the pronts made bv the plan.

The Canadian) EG@ueation Savings Grant is the big news this vear, You get an instant return of 20% regardless. of investment returns.

Here is haw it works. A par- ent, grandparent or great grandparent. can buy a Registered Education Savings Plan fora child up to the age of

The last contribution is he in the calendar vear the child turns 17, Adopted chil- dren are eligible.

The government: pays the grant of up to 4 maximum of 20% on the first $2,000 invest- ed which is $400. The $400 Canadian Education Savings Grant is then added on to the $2,000 investment instantly making the RESP worth $2,400.

If vou were to do this for your child over a 10-vear peri- od, there would be hefty sum available to pay for post sec- ondary education costs that are expected to skyrocket over the next decade.

The RESP has become even more flexible this __vear. Investors can chuose Canada savings bonds, mutual funds, guaranteed investment. certifi- cates and term deposits.

The grant is available tor more than one child in the fam- ily as long as they are under the age of 18. If you have three children and can contribute $6.000, the government wants to give you $1,200. And ds Registered Education Savings Plans could, under many cir- cumstances, be transterable from one child to another in a family should the original ben- cficiary decide not go on to post secondary education.

The maximum _ lifetime Canadian Education Savings Grant is $7,200 for each bene- ficiary.

In the past, many people stopped short of investing in an RESP because the child might not continue to go to school. Thar’s no longer a problem. The original RESP investment can be taken out tax free since it was made with after-tax dol- lars to begin with. And the earnings can be rolled into a Registered Retirement Savings Plan so income tax can be deferred. This is a major new enhancement.

The money from the sav- ings plan can be used by a stu-

dent ationdin: approved u noel HACHITS Oh cit tats enatsed COURTESY Most people tinnk ono nuiten. But the moneys ean pn ter school related housing, roomy and board. books and other educanion expenses. Here are some tps: @ cvery child registered as 2 beneficiary must have a social insurance number. This can be obtained through Canada Emplovment Centers: @ be determined but pauent. The grant is new this vear and the government hay been slow to publish the regulations. The plan is such a good deal many

Wednesday, December 9. 1996 - Nortn Shore News — 25

north shere news

BUSINESS ney

Credits Caton, For more itor mation Reantercd Educait

Drain Suni the vie prea Savaias Plans caatact any af tte deat of anvestuieit aid unas wher uiiton’s teleconsadtiants at Maer ervey al 3-300,

these Phatimas nat be the bow

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mdading stocks and) bonds Vhose orem on oa tex opboas will resonimend ont

BCRAIL NOTICE

B.C. Rail apologizes for any undue delays during the weeks of December 7th and the 14th at Marine Drive & 31st during the hours of 9 am - 3 pm for railway bridge upgrades.

tanga institugerts are otter ing the Canadian Registered bducation Plains tor the titst Seme may uot boo aval

able antl November @ iiac an RRSP, there

VOSUMERE GPhone these buy a : Educauen Sauings Plain, your homework or ask a finan oil planner tor advice: @ scek a financial planner ata

North Shure 713

Christmas Gift Suggestions ESTATE JEWELLERY

1637 Lonsdate Ave = 1730 Manne Or. North Yancouver ‘West Vancouver

Now feeling secure comes with more choices and more options than ever before. And it all starts with increasing the sales period from October 1998 to April 1, 1999. Each month a new series goes on sale. So you can purchase the original Canada Savings Bond and our new higher interest Canada Prernium Bond when the time is right and easiest for you.

They're both still perfect for the secure part of your financial plan as they’re 100% guaranteed by the Government of Canada. The Canada Premium Bond is cashable once a year on the anniversary date while the Canada Savings Bond is as flexible as ever and cashable any time.

This year you'll have the option of registering both bonds in an RRSP or RRIF. You can purchase the Canada Savings Bond and the Canada Premium Bond for as litile as $100 and there are no fees of any kind.

Series 56 and 5 on sale now until January 1 wherever you bank or invest.

3.75”

Year 1

CANADA SAVINGS BOND

Series 56. Cashable any time.

4.25” 4.50”

Year 2 Year 3 CANADA PREMIUM BOND

Series 5. Cashable once a year. Annuai compound rate of 4.25% for C-bond if held for 3 years.

4.00”

Year 1

Makes a great gift. Ask for your gift card where you bank or invest.