The Power of Compound Growth
Compound growth produces a “snowball effect” that occurs when you put your money in an investment that delivers a return and then your earnings are re-invested. The longer you leave your money, the greater the opportunity for growth. If you begin saving when your child is born, you’ll earn more money for their education. Even if you were to save twice as much when your child is older, you still wouldn’t have as much in the end.
Values illustrated are based on the Flex First Plan, by the beneficiary ages at which the plan is opened. Amount Invested is the money contributed to the plan (assuming all planned contributions are made), less fees as described in the Prospectus. Contributions of $100 per month are assumed to start in January of the year the plan is opened for the beneficiary, with the last contribution in December of the calendar year in which the beneficiary turns age 17.
Canada Education Savings Grant payments (CESGs) are assumed to be 20% of contributions. Income earned on the Amount Invested and CESG is compounded monthly, up to July 31 of the year the beneficiary turns 18, based on an assumed 5% annual rate of return, less fees. This comparison is strictly for illustrative purposes and is not intended to represent any actual or future investment performance. The actual funds available will vary and may be less or more than illustrated here.