Creating a savings fund is one way to set up your child for success, and this is especially true for their education. The more sizable your savings, the more options they’ll have for university and, later on, employment. But in 2020, only 69% of Canadian children have savings prepared for postsecondary education. This number is actually up 6% from 2013, but the pandemic has increased financial concerns among postsecondary students, with reports that they are taking on more debt.

If you want your kid to avoid this scenario, you can start by considering the best ways to invest for your child’s studies now. To help you in your search, here are four options to look into:

Children’s Savings Account

Newswire highlights that most families have recently felt an increased economic burden, and that children should be taught financial literacy through learning how to save. A straightforward way to this is to start up a savings account, which will be very beneficial in their future. Most savings accounts for children also include an interest rate as part of their services to help the money grow. Make sure you look into ones that have no monthly fees, unreasonable lock-ins, or minimum balances. Once they reach a certain age you can give them access to the account. The longer you hold off the better.


Tuition fees are averaging at $19,498 a year and are likely to keep rising faster than salary increases. However, this high cost isn’t worth sacrificing your child’s future postsecondary education for.

Fortunately, Canadians have the option to invest in a Registered Education Savings Plan (RESP). It’s an account that is designed to help them save up for higher education. Thanks to the Canada Education Savings Grant, RESP contributions are eligible for a top-up of up to $500 per year, and a lifetime maximum of $7,200. Growth is also tax-free and the account earns interest income. Finally, RESPs come in three types: the Individual RESP, the Family RESP for more than one beneficiary, and the Group RESP, where there can be multiple benefactors. You’ll need to look more into the specifics to figure out the RESP type for your child.

Trust Funds

Trusts are essentially a legal agreement where the settlor — in this case, you — place assets into a trust and nominate a trustee to manage those assets. This applies to money, property, or investments, and the trust is managed on behalf of your children, who are known as beneficiaries.

An adult must be responsible for providing the investment instructions and enter into binding financial agreements on behalf of the minor. The settlor’s spouse can then serve as the trustee. Trusts are a safe way to manage funds, as only the trustee can make withdrawals while the child is under 18. Once they reach adulthood, the money can be transferred and put in their name, which they can then use to finance their education.

Term Deposits

Unlike a savings account where funds are accessible, a term deposit requires you to lock away an amount of money for an agreed ‘term’ or length of time. Simply put, you can’t access the money until the term is up. In return, there’s a guaranteed rate of interest depending on the term you select, so there’s the assurance of growth, and that you’ll know exactly when to expect the return of investment.

The downside is that there is a penalty fee for choosing to withdraw money sooner than the agreed time, and in most cases, you’ll need to inform the institution 31 days in advance, so term deposits aren’t ideal for emergency situations. A major advantage, however, is that it helps you avoid using money impulsively — which is something you want to teach your children as well. Examples of term deposits are a certificate of deposit (CD) and time deposits, both of which can be used to safeguard funding for your child’s education.

Don’t forget that you also have the option of investing in multiple options to maximize your finances and generate more revenue. The key is to invest as early as possible, so you’ll have the power of compounding and time on your side. If you’re looking to find more ways to finance your investments, check out our own list of the ‘Top 10 Most Profitable & Successful Small Business Ideas to Start’

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