How to Save for a Baby in Canada (2026)

You usually get about nine months of notice and a mountain of advice about strollers. The money question is simpler than the advice makes it sound. A baby’s first year in Canada runs roughly $12,000 to $21,600, depending mostly on childcare (RBC (opens in a new tab)). The bigger surprise for most families isn’t the gear, it’s the pay cut: when a parent goes on leave, EI replaces just 55 percent of their income, capped at $729 a week in 2026. So the real job before the baby comes is building a cushion. Here’s a simple plan to save for a baby: size up the cost, cover the income drop, pick a timeline, and park the money somewhere sensible.

How much should you save for a baby in Canada?

For most families, a first-year cushion of around $10,000 is a solid target. A baby’s first year costs about $12,000 to $21,600, with childcare the biggest swing, and the one-time gear (car seat, crib, stroller, highchair) runs $1,000 to $5,000 (RBC). You won’t pay all of it up front, and government benefits offset part of it, so the goal is a real buffer saved, not the full sticker price sitting in cash.

The cost nobody budgets for: your income on leave

For many households, the biggest baby expense is the drop in take-home pay during parental leave, not the diapers or the crib. Standard EI benefits replace 55 percent of your earnings, to a maximum of $729 a week in 2026, about $3,160 a month, because benefits are capped at $68,900 in insurable earnings (Government of Canada (opens in a new tab)). Pick the extended option to stretch your leave longer and the rate drops to 33 percent, up to $437 a week.

Here’s why that matters. If your household normally takes home more than what EI pays, the difference is what your baby fund is really for, and over a leave that can run a year or more, the gap adds up fast. If you live in Quebec, you’re covered by the Quebec Parental Insurance Plan (opens in a new tab) instead, which is generally more generous, up to 70 to 75 percent of earnings on a higher $103,000 income cap in 2026. Either way, the plan is the same: save the gap ahead of time so the leave feels like a choice, not a squeeze.

Set your target

Your number is built from three pieces. Add them up and most families land near $10,000.

• One-time setup: $1,000 to $5,000. Car seat, crib, stroller, highchair, and the rest. Buying secondhand where it’s safe to (car seats are the one thing to buy new) lands you at the low end.
• Ongoing monthly costs, partly offset. Feeding, diapers, and the everyday items are real, but the Canada Child Benefit (opens in a new tab) pays up to $679.75 a month, tax-free, for a child under 6 if your family income is under $38,237 (July 2026 to June 2027), which softens the ongoing bill.
• The leave income gap. Your normal monthly take-home minus your EI benefit, times the months you’ll be off. For most families this is the biggest of the three.

Worked example: say gear runs about $3,000, and you want three months of a roughly $2,000 monthly income gap covered before benefits and your regular pay smooth things out. That’s around $9,000, so round to a $10,000 target. We’ll use $10,000 for the math below.

Pick a timeline (the savings math)

This is the part that turns a vague goal into a monthly habit. The table below is straight division of a $10,000 target across a few timelines. It doesn’t count any interest you earn while saving, and it doesn’t count benefits you’ll receive later. It’s just what you set aside each month to reach $10,000. If you’re planning ahead, the pregnancy itself is a built-in runway, so the nine-month row is realistic.

Pick the row whose monthly number your budget can absorb without straining. Start before the baby’s here if you can, since even a few months of a smaller amount beats scrambling later. The math scales cleanly: a $5,000 starter fund halves every figure, and a $15,000 target adds half again. Want a different number? Our savings goal calculator does the math for any target, timeline, or monthly budget.

Where should you keep the money?

Keep the baby fund in a high-interest savings account (HISA) at your own bank, separate from your everyday chequing so you’re not tempted to dip into it. A baby fund is short-term money you’ll need on a fixed date, so stability beats upside: not a chequing account earning nothing, and not the market if you’ll need it within a year or two.

Everyday HISA rates in Canada sit around 2.75 percent as of July 2026 (EQ Bank’s Personal account is about 2.75 percent and CDIC-insured, for example). A few banks run promotional rates near 4.5 percent for the first few months on new deposits, but those promos expire and then drop, so only chase one if you’ll move the money when the rate resets. A TFSA can work too if you have contribution room. For a fuller look at where to stash short-term savings, see our roundup of the best savings apps in Canada, and you can check which banks connect to Lodavo on our banks page.

There’s one baby-specific account worth knowing, though it’s for later, not the leave cushion. Once your child has a Social Insurance Number, an RESP for their education earns a 20 percent government match through the Canada Education Savings Grant (opens in a new tab), up to $500 of free money a year and $7,200 over their childhood. The leave cushion comes first. The RESP is where a chunk of that monthly Canada Child Benefit can go once you’re back on your feet. Whatever you choose, the account is yours, at a real Canadian bank or credit union. Lodavo isn’t that account, and it never touches the money. More on that below.

Automate it so you don’t have to think about it

The Canadian household saving rate was just 3.5 percent in early 2026 (Statistics Canada (opens in a new tab)), and a newborn is not the season to rely on willpower. Automate it and pay yourself first. For the bigger picture on building the habit, see our guide on how to save money in Canada.

• Set an auto-transfer for payday. Move your monthly amount into the baby HISA the day you’re paid, before it can be spent.
• Split it to match your pay cycle. Paid every two weeks? Move about $417 each time to hit $833 a month without thinking about it.
• Route the Canada Child Benefit straight in. Once it starts arriving, send some or all of that monthly deposit into the fund or the RESP before it blends into everyday spending.
• Funnel windfalls. Baby-shower cash, a tax refund, or a work bonus can go straight to the fund.

Automating the transfer is the highest-leverage move here. You decide once, and the habit runs while you’re busy with everything else a newborn brings.

How Lodavo makes saving for a baby more fun

Saving for a baby is a long stretch of steady transfers during an expensive, tiring season, and that’s exactly when motivation tends to sag. You build the fund in your own bank account, as described above. Lodavo is Canada’s first prize-linked savings app, and it connects to that account read-only through Plaid (opens in a new tab) (bank-grade security, scoped access, never your banking password). Plaid covers over 99 percent of deposit accounts in Canada, so almost any bank or credit union works.

Each week, Lodavo looks at your savings balance and gives you free tickets in a weekly draw, where you can win up to $10,000 and at least one user takes home a guaranteed prize of $100 or more. The more you save toward the baby, the more tickets you get. Lodavo isn’t the account, and it never lends, holds, or moves your money. It just turns the months of saving into a weekly shot at a prize. You can see past results on the winning numbers page and check how each draw is verified on the provably fair page.

So the same $833 a month that builds a $10,000 cushion also stacks up tickets every week along the way. The baby is the goal. The draws are the fun part that keeps you going.

Terms and conditions apply. No purchase necessary (alternate method of entry available). Skill-testing question required. Open to legal residents of Canada who are the age of majority. Odds depend on the number of eligible entries received. Full rules and odds at our contest rules.