What is the Canada Learning Bond?
The Canadian Government introduced the $500 Canada Learning Bond in 2005 to provide additional support for low-income families, and giving them a head-start in saving for their kids education after high-school.
You need to start an RESP plan, but you don't need to contribute any of your own money to get started.
Who qualifies for the Canada Learning Bond?
1. Your child's birthdate is January 1, 2004 or after, and
2. Your family's net income is less than $35,595.
If you get the National Child Benefit Supplement (often referred to as the baby bonus), you are eligible to receive the Canada Learning Bond. As long as you receive the baby bonus, you will continue to receive an additional $100 per year, up to $2,000!
How do I get the Canada Learning Bond?
You need to open an Registered Education Savings Plan in order to receive the $500. You do not need to contribute any of your own savings, but a RESP has to be in place to deposit the money into.
Make sure to ask the RESP provider if they will apply for the CLB on your behalf, some financial institutions will not automatically do this. All group RESP providers will do this for you. Some financial institutions will charge to open and RESP, group providers will do this for free.
When can I take the money out?
The Canada Learning Bond will stay in the RESP account and collects interest until the child enrolls in post-secondary education. At that time, the child receives the all the money that has accrued in the account.
If the money is not used within 26 years after you opened the account - (if your child does not pursue post-secondary education) - the Canada Learning Bond will be returned to the government.