The TFSA is an ideal complement to an RESP to finance your children’s education – or even your own.

You can use your TFSA to save money for your children’s post-secondary education. In this respect, the TFSA is subject to many fewer conditions than the Registered Education Savings Plan (RESP).
The RESP has a number of conditions attached, especially with respect to eligibility of beneficiaries and use outside of a study program. The TFSA, however, isn’t saddled with any such conditions. For example, if the child you have been saving the money for decides not to pursue a post-secondary education, you can recover your funds with no questions asked.
But don’t forget: the RESP gives you an immediate return of 20% to 30% in the form of government grants.* (Note, however, that adult beneficiaries are not eligible for the CESG or the QESI.) The TFSA does not offer this spectacular advantage. So you need to weigh the pros and cons very carefully. For example, you would probably want to invest enough in an RESP to maximize your grants, and then put any additional savings in a TFSA. Right away, this money could be used more freely than the savings in your RESP.
For the same reason, if you want to finance your own further education, a TFSA would likely be a more flexible option than an LLP (Lifelong Learning Plan), which works more or less like a HBP (Home Buyers’ Plan), but is intended for continuing education.
And don’t forget that any adult can have an TFSA regardless of income level. If you are already pursuing studies and receive a scholarship that you don’t need to use all at once, you can use your TFSA to shelter it from taxes.

* RESP contributions are eligible for a federal grant (Canada Education Savings Grant, or CESG) equal to 20% of the contribution, to a maximum of $500 per year and a lifetime limit of $7,200. Quebec residents are also eligible for a provincial refundable tax credit (the Quebec Education Savings Incentive, or QESI) equal to 10% of the contribution, to a maximum of $250 per year and a lifetime limit of $3,600. Note that adult beneficiaries are not eligible for the CESG or the QESI.

For more information or to open your FÉRIQUE TFSA:
Use our toll-free line from wherever you are, with no waiting, 8:00 a.m. to 8:00 p.m., Monday to Friday.

1 800 291-0337

You can also reach us by e-mail at: service.ferique@bnc.ca