Registered Education Savings Plan (RESP)

Registered Education Savings Plan (RESP)

You want to do the best you can for your children, and that includes setting them up for a successful future. Post-secondary education costs are rising, quickly, so it’s important now to start thinking about how you’re going to support your children during this time in their life. One of the best ways to set them up for success is to start investing in an RESP, or Registered Education Savings Plan.

What is an RESP?

This plan is a flexible, tax-deferred investment that offers growth and government assistance to help you secure your children’s future. When you open an RESP you will receive grants from the federal and provincial governments, which could be up to 40% of the amount invested over time until the individual child is 18 years old. You can contribute up to $50,000 per child over a lifetime, and you can contribute that all at once or over time – there isn’t an annual limit to contributions. 


It is important to note, though, that when your child goes to withdraw the money for educational purposes they will be taxed on any interest that has accumulated on the investment.

How does the RESP work?

As a parent or guardian, an RESP would be opened for your child when they are young. You can open the RESP at any time, up until the beneficiary is 18 years old. Once the account is opened anyone, including grandparents and other guardians, can be make contributions to this investment plan so everyone involved in your child’s life can feel like they are helping to set them up for a great future.

Can you write off RESPs?

Any investments made will be an income tax benefit for the person who made the contribution.

How does my child use the RESP?

When it comes time for your child to obtain post-secondary education they can start accessing the funds available in their RESP. If your investment was eligible for any government grants, they would have been added to the amount available already. Your child will need to provide proof of acceptance into a post-secondary institution to receive the funds. The monies will be given to them to pay towards costs associated with post-secondary education.


If they choose not to obtain the education, though, the financial institution can give the contributions back to the originating source, tax-free. If this happens, any grants received in the RESP account will be returned back to the government and cannot be redeemed.


It’s never too early to start thinking about the future you want for your children, and saving for their future education costs is a great way to start them off in the right way. Post-secondary education costs are rising, and paying for that education can be stressful. Harpreet Puri can help parents to start planning for their children’s futures. Call us today! 

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