Top five Registered Education Savings Plan tips...

1. Talk to a financial planner about whether an individual or family RESP is more appropriate for you.

2. Take advantage of carry-forward Canada Education Savings Grants.

3. Don't withdraw RESP contributions before your child starts a post-secondary program.

4. Consolidate your RESPs for a single child so you can carefully monitor contributions.

5. Have a back-up plan in case your child decides not to pursue post-secondary schooling. If an RESP is 10 years or older, and the beneficiary has still not enrolled in a post-secondary program by age 21, you can withdraw the income earned from your contributions and transfer up to $50,000 to your RRSP. However, you will have to pay back Canada Education Savings Grants, and will face a 20% tax on gains earned above $50,000.

In-trust Accounts (ITF)

An in-trust account is a great way to save for a child's higher education. With an in-trust account, an investor (the “trustee”) manages money (or other assets) for a child (the “beneficiary”) until the child reaches the age of majority. At that point, the trustee can make any necessary arrangements.

There may be tax advantages too. If properly structured, your child may pay taxes on growth in an in-trust account (capital gains). And because your child will probably have a lower taxable income than you, he or she will pay little, if any, tax.

Five good things to know about an in-trust account:

1. You can contribute as much money as you want.

2. All capital gains may be taxed in the hands of the child.

3. You, as the donor, are taxed on all income including interest, dividends, foreign, and other income if earned while you are a resident of Canada during the applicable year.

4. If funds for an in-trust account come solely from Child Tax Benefit payments or an inheritance, income is taxed in the hands of the child.

5. Money stays in the hands of the child if he/she decides not to pursue a post-secondary education