Another education saving strategy is to open a regular investment account in your name "In Trust" for your child. With this type of informal trust account there are no restrictions on the amount you can put away for your child, and the money can be used for purposes other than post secondary education. However, payments into Trust accounts are not eligible for the CESG.
The taxation on a trust account is also very different from an RESP. Generally you are taxed for any interest and dividend income on original investments. Your child is taxed on any capital gains and any reinvested interest or dividend income. However, if the funds in the account are from Child Tax Benefit payments or an inheritance, then income will be taxed in the child's name.
Once your child turns 18, he or she has the right to assume control over the money. Parents who want more control over the funds may wish to set up a formal trust, which generally involves legal and accounting advice.
