Registered Education Savings Plan or RESP is a plan that makes sure parents are able to give their children a bright and better future. We all know the right education nurtures children and prepares them to face life challenges in future. In days where education is a must and exorbidant, RESP ensures your child gets the best education that is available at the best institutes.
How does RESP work?
The mechanics are simple. After high school when your child’s post-secondary education starts, the institute where he/she studies withdraws payments from the funds that are under the care of Educational Assistance Payments (EAPs) which is actually the Government’s grant money in RESP along with the money that you have invested.
You can open an RESP in various financial institutions like banks, investment firms and trust companies, credit unions and mutual fund companies. Our advisors are also available to help you find the right RESP Plan.
Why go for an RESP?
- You have the privilege of making monthly or annually contributions of maximum $50,000 per child.
- There will be absolutely no tax on your earnings as long as your investment savings remain in the RESP.
- The Federal Government also plays a major role as it contributes to the RESP savings in the form of a grant. For this, it is essential that you open an account for your child at the age of 14 or below.
- The RESPs also include varieties of investment options like stocks, bonds, mutual funds, GICs, etc. Accordingly, you may decide how to invest your savings and where to invest your savings.
- An RESP remains active for up to 35 years under specific rules and regulations for the beneficiaries who are eligible for the disabled tax credit.
- It is easy for students to access the savings through EAPs and use them during their enrollment in their dream universities, colleges, etc.