Tax-Advantaged Savings Accounts

There are several tax-advantaged savings accounts available to parents in Canada. These accounts offer various tax benefits, such as tax-free growth or tax-deferred contributions. Some of the most common types of tax-advantaged savings accounts include:

Registered Education Savings Plan (RESP): An RESP is a tax-sheltered savings plan designed to help parents save for their child's education. Contributions to an RESP are not tax-deductible, but the money in the account can grow tax-free. When the money is withdrawn to pay for qualified education expenses, it is taxed in the hands of the student, who is likely in a lower tax bracket.

Tax-Free Savings Account (TFSA): A TFSA is a flexible savings account that allows you to invest in a wide range of investments, including stocks, bonds, mutual funds. segregated funds etc. Contributions to a TFSA are not tax-deductible, but the money in the account can grow tax-free. When you withdraw the money, you don't have to pay taxes on the gains.

Registered Retirement Savings Plan (RRSP): While not specifically designed for children, an RRSP can be used as a savings vehicle for your child's future. Contributions to an RRSP are tax-deductible, and the money in the account can grow tax-free. However, the money will be taxed when you withdraw it, so it's important to plan accordingly.