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Opening an RESP is a great way to save for your child's education. Tax on investments is deferred until withdrawal, at which point it is taxable in the hands of the student. Most students are low-income earners, so the tax payable is often low.

With an RESP, you can invest in stocks, bonds, mutual funds, ETFs, GICs, Seg funds and more.

An RESP allows you access to the Canada Learning Bond (CLB) and the Canada Education Savings Grant (CESG). 

The CESG offers a 20% match on contributions made up to $500 annually. Unused CESG amounts carry forward until the child is 17, but the annual contribution limits make it ideal to start contributing before the child is 9.

The CLB is money that the Government of Canada contributes to an RESP. Up to a maximum of $2000, and it isn't dependent on your contributions.

If your child is earning income and would like to invest outside of an RESP, consider opening an informal trust account. A minor cannot legally own securities, but an informal trust allows them to invest under the direction of a parent or guardian. Growth in an informal trust is taxable in the hands of the child, so usually, this is an attractive option until TFSA becomes available at 18.
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