RESP for Kids Education


Every parent dreams of their child’s future. Many times this future involves time in post-secondary education. Why not set your child up for a future full of success by beginning an RESP. Prices of post-secondary education can make parents hold their breath, as well as some students. Give your children an extra boost of confidence by taking away some financial worry.

 What is an RESP and What does it do?

An RESP is known as a Registered Education Saving Plan. It is a government-assisted, flexible, tax-deferring investment. Anyone can contribute to an RESP once it’s opened. Parents, Guardians, Grandparents, Friends and Family can contribute from the time the it is opened, until the child is 18-years-old. The RESP can be opened from the time of your child’s birth, until he or she reaches 14 years of age. You can contribute up to $50,000, and you can do it all at once or spread it out over a period of time.

Once the child is ready to move on with post-secondary education, all the child needs to do to start accessing the RESP funds are two simple things. He or she needs a Social Insurance Number, or SIN, as well as proof of acceptance from a University, College or other Post-Secondary Institution. After having those, funds can be released. If the RESP received any grants from the government, that money will already have been deposited in the RESP.

Educational Assistance Payments, or EAPs, will start when the child is enrolled in post-secondary education. The payments are still part of the RESP, coming mostly from the grant money and investment earnings. Either parents or child can withdraw money, but the tax on the EAP is payable solely by the student.

Why Contribute To an RESP?

RESPs come with tax benefits, and all contributors get tax benefits too. The amount withdrawn from RESP will not be taxed until it exceeds the amount you put into the fund. All dividends, capital gains, and interest payments, earned in an RESP are not taxable.

 What happens if the child doesn’t go to Post Secondary Education?

Don’t worry or stress if your child decides to wait, or simply take time choosing what to do. There is no rush, as your child doesn’t have to go to post-secondary education right away. The money will get returned to the financial institution, and will sent back to the contributors.  Grants would not be redeemed and returned to the government.

 An RESP helps your child’s education by giving the child a financial boost when facing the challenges of affording future education. An RESP creates a bright future, setting the student up to get the desired education.