The best insurance plan for your Kids Education


All parents want the very best for their children, and this includes education. Parents dream of the day their child holds a post-secondary diploma, but getting to that day may take some serious planning. With the cost of post-secondary education, every little bit of money helps, and that’s were RESPs come in. By starting now, your child can have a head start on future education.

What is an RESP?

A Registered Education Savings Plan, or RESP, is a government-assisted, tax-deferred investment, made to be flexible and encourage growth. RESPs can be opened any time until the child is 14-years-old and will grow until the child is 18-years-old. Throughout the child’s life, you can contribute up to $50,000. Whether you do it all at once or over a period of time is up to you. Once opened, anyone can contribute to this investment plan, Grandparents, Parents, Aunts, Uncles, and Godparents are just a sample of those able to contribute.

How Does the Child Access the RESP?

Once the child, or student, is ready for post-secondary education, he or she can start using the RESP. If the RESP received any grants from the government, those grants would already be in the available funds.

The student will need:

  • Proof of acceptance from a post-secondary education institution. The money will then be released to pay towards post-secondary education costs and associated fees.
  • Social Insurance Number may be required

The child will get taxed on any interest accumulated on the RESP once he or she takes out the money. If the student decides to postpone going to post-secondary education or not at all the money can be returned to the financial institution. Then the money can be given back to the contributors. In this situation, any grants given would also be returned to the government and not be redeemed.

RESPs can be kept open for 36 to 40 years. Check your RESP though, to confirm the number of years your RESP will stay active. The child doesn’t have to go to post-secondary education right away after high school.

Educational Assistance Payments

Once the student is enrolled in post-secondary education, he or she can begin getting payments called Educational Assistance Payments, or EAPs.  EAPs are from the RESP, coming from grant money and investment earnings. Tax on EAPs are payable by the student. Either the student or the parent can withdraw the money.

Set your child up for success and by starting early, you can develop a budget you can stick to for years. An RESP is the gift of learning, and definitely a gift that will be appreciated.