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Registered Education Savings Plan (RESP)

What is a Registered Education Savings Plan (RESP)?

The Registered Education Savings Plan is the ideal way to save for full-time post-secondary education in Canada. You can open a RESP for your own children, your grandchildren or any child that is related to you - or even yourself! You can include investment funds in your Plan, or just use it as a straightforward, low risk daily interest savings account if you prefer.


RESP: your tax-sheltered investment for the future

The RESP is a secure and tax-efficient way to save money for education. Your savings grow tax-free until the income is withdrawn by your chosen beneficiary. The savings can go towards any educational expense, including university fees, accommodation, books, and travel. Your child will need to attend a qualifying institution to withdraw the RESP.

 

How much can I contribute?

With a RESP, you can invest as little as $25, up to a lifetime maximum of $50,000. What's more, the government will contribute 20% of the first $2,500 you invest each year, under the Canada Education Savings Grant (CESG) scheme. There's a yearly maximum of $500, and a lifetime maximum of $7,200 for each individual child.

 

What types of RESPs are available?

There are two types of RESP, family and individual plans.

 

Family RESP: You can open a Family Registered Education Savings Plan for as many children as you wish, but they must all be related to you. (Adopted children and step children are eligible). Your children will need to be siblings (brother or sisters) in order to claim the CESG.

 

Individual RESP: Anyone can open a RESP, even if they are not related to the child. You can also set up a RESP for another adult or even for yourself. You can choose how your money is invested, and also control the payments made to the beneficiary.

 

Key features of a RESP

  • Tax-free growth for your savings
  • Minimum payments of just $25
  • Available for individuals or families
  • Helps plan for rises in college and university fees
  • Anyone can contribute to the RESP - friends, family, grandparents
  • You may be eligible for extra, automatic government grants
  • Contributions make ideal birthday presents!


Extra bonuses for low income families

If you are a low-income family, you may also be eligible for a Canada Learning Bond (CLB). if your children were born on or after January 1, 2004, and you receive the National Child Benefit, you will receive an additional $500 CLB when you open an RESP. You'll then receive $100 for each year you have your RESP and remain eligible.

 

How Jeff can help

As an experienced financial advisor, Jeff can help you set up your RESP just the way you want it. He'll guide you through the choices, suggest ways to maximize your investment in the RESP, and check if you're eligible for any additional grants.

 

For expert help on how to set up a RESP, call us on 519-485-5801

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7 St. Andrew Street

Ingersoll, Ontario

N5C 1K6 Canada

 

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