Why Choose an RESP


When you decide to help your children achieve their dreams for a successful future,  finances play a major part. One way to support your children’s future financially is opening and contributing to, an RESP.

What is an RESP?

If you are new to investments, an RESP, or Registered Education Savings Plan, is tax-deferred, government-assisted, investment plan designed to help save for a child’s future education. Parents open an RESP for their children’s post-secondary education, but you can still open one for yourself or other adults.

Reasons To Get An RESP

  • Length of Time the RESP can stay open: An RESP account can be open until child is 35 year old so your child does not need to go to post-secondary education right after high school. If your child decides to cancel going to post-secondary education, the financial institution can have the money returned. The contributors will have the money given back in this situation. If there were any grants, they would be returned to the government and not redeemed.
  • Anyone can contribute: Anyone can put contributions into the RESP once it it opened, such as grandparents, parents, godparents, uncles and aunts. Tax benefits are available for all RESP contributors.
  • Options for investing: You can choose options like risk tolerance or time horizon, speak to your provider to learn about different options such as stocks, bonds and mutual funds.
  • Educational Assistance Payments: When the child’s enrolment in post-secondary education is confirmed, he or she can begin getting Educational Assistance Payments, or EAPs. EAPs come from the RESP plan, drawn from investment earnings and grant money. Tax on EAPs are payable by the student only. Both the student or the parent can withdraw the money, but the person who is named beneficiary can receive the EAPs.
  • Tax-free: No tax is paid on investment earnings as long as nothing is removed from the RESP. Once the money is taken out, the child will get taxed on any interest accumulated on the RESP.
  • Government grants: There are federal government grants added to lower-income families RESPs, and you may be eligible for a provincial grant.

The student will need proof of acceptance from a post-secondary education institution. Once the student has needed documents, money will then be released to pay towards post-secondary fees, costs and education.

Choosing an RESP will give you peace of mind and security, knowing your children’s future education has a good start. An RESP will give them the best start to a successful future.