BMO Financial Group

BMO Financial Group

November 03, 2011 09:16 ET

Financial Literacy Month-BMO's Tip of the Day: Start an RESP Early and See Their Future Grow

TORONTO, ONTARIO--(Marketwire - Nov. 3, 2011) - BMO is releasing a series of financial tips throughout November to celebrate Financial Literacy Month in Canada. As part of Making Money Make Sense and BMO SmartSteps, the tips are designed to help individuals and families save and manage their day to day finances more effectively.

BMO's tip of the day: Get a head start and begin contributing to a child's Registered Education Savings Plan (RESP) early on.

  • Anyone, including grandparents, can invest in a child's future by opening up or adding to an RESP, an account designed to put aside funds for a post-secondary education.
  • Don't delay and watch your child's RESP grow tax-free. If you begin investing $200 per year from the time your child is born until the age of 18, he/she could have up to $11,000 saved for their post-secondary education. However, if you wait until the child turns 10 to begin contributing $200 per year to an RESP, savings would total less than $4,000.

"Starting early and contributing 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. "While most children 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."

BMO Financial Literacy Month Tips

November 1: Pay more than the minimum payment on a credit card balance.

November 2: Become mortgage-free faster by choosing a shorter amortization.

For more on financial literacy, BMO encourages Canadians to visit and

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