A RESP Child Plan is the best way to invest in your child’s educational future
The Registered Education Savings Plan is offered by the government of Canada for the purpose of saving for your child’s higher education. With this tax-advantaged plan and a grant from the government of Canada, you can save enough to pay for college fees.
What are the benefits of RESP?
Main benefits of RESP are
- Tax-sheltered growth.
A RESP account is a tax-free account, so the growth is tax-free. Withdrawals are taxable, but since your child’s income falls into a lower bracket, the taxes are minor.
- Government Grant.
In addition to what you contribute, the government also puts extra money into it, which contributes to growth. Nevertheless, expert advice can help you to find out how much your child will receive as a government grant.
- Provider Bonus or growth.
Money invested in RESPs grows faster than traditional investments.
- Funds can be used for all educational purposes.
You can use the accumulated funds for full-time education, part-time education, or any other mode of learning.
- It is hard to pool money without RESP
Even though it is difficult to save money, RESPs are not big investments, giving you the opportunity to deposit small amounts on a regular basis.
How many types of RESP, Child plans are there?
The RESP, registered education savings plan can be categorized into three types.
- Individual RESP – As the name specifies, the individual RESP is for single beneficiaries.
- Family RESP – A family RESP is for more than one beneficiary, in other words, a plan for two or more children. Each beneficiary has access to the entire amount accumulated.
- Group RESP – Is for one beneficiary, but there may be more than one contributor. Multiple family members can contribute to one RESP and save for one child.
Can RESP be transferred?
If your child does not wish to pursue higher education, you may transfer the RESP to another child.
Is there any limit on RESP contribution?
A lifetime RESP contribution limit is $50,000, but there is no annual contribution limit on RESPs. Contribute about $2500 a year to maximize your CSEG.
RESP age limit
You can contribute to an RESP, registered education savings plan for up to 31 years. However, the CSEG is up to 18 years.
What is the RESP withdrawal limit?
There is no cap on withdrawals for PSE (Post-Secondary Education). Withdrawals from the EAP (Education Assistance Payment) are limited to $5000 for full-time and $2500 for part-time students.
Is RESP a great idea?
Yes, a RESP is the best investment for your child. Let us help you fulfill your child’s education dreams today.
Wana to save for your kids education today? Use our RESP Calculator tool and find out how much you can save. Or contact us for further assistance