Registered Education Savings Plan

Yearly the costs of post-secondary education are rising, and although there are a variety of student loans offered, the amount to repay after graduation can be crushing.

A Registered Education Savings Plan or RESP aids a family in saving for a child’s college education. It is registered through the government of Canada and allows education savings to grow tax-free and also gain some funds through government grants or Canadian Education Savings Grant or CESG.  Studies have shown that even a small amount of savings in an RESP increases the possibility that a child will carry on their education following high school.

RESP Explanation

Understanding the RESP

Key Points

  • Who

    Parents, grandparents, guardians, other relatives, or friends may open a RESP for a child.

  • What type of Education?

    RESPs may be utilized to pay for part-time or full-time education in a university or college, trade school, CEGEP or an apprenticeship platform.

  • Government Funding

    The Canadian Government also aids savings in RESPs to grow much more rapidly by offering special savings encouragements such as the Canadian Learning Bond and the Canadian Education Savings Grant. RESP savings of $2,500 every year is entitled to a 20% Canadian Education Savings Grant, up to a max of lifetime $7,200 for each child.   An added grant is also accessible for middle and low-income families; a separate submission is needed to be submitted to acquire this grant. Children from low-income families also are eligible for the National Child Benefit Supplement may also collect an innovative Canadian Learning Bond also known as CLB of $500 in their RESP, with added payments of $100 every year until age 15.

  • Kinds of RESPs

    RESPs are accessible from credit unions, certified financial planners, banks, or dealers of group plans. Prudent Asset can set-up appropriate RESP plan for your children. It is vital to shop and find the type as well as costs best fits into a family’s financial planning.  There are 3kinds of RESPs to select from: individual, family, or group plans,