Registered Education Savings Plan Facts

By Author: Julia Bennet
Total Articles: 1387
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Every child deserves proper education so that he can have the chance to a good life and the truth is that with the current economic situation it is quite difficult to save money for your child’s education. Nonetheless, if education is important to you and you want it to play an essential role in the life of your child you should consider a Registered Education Savings Plan. RESP enables parents to make sure their children will have the best education and to save money for college in time so that when the time comes, this will not be a financial burden.

It is common knowledge that post secondary education is quite expensive and for this reason Registered Education Savings Plan is one of the best solutions you have at your disposal for the education of your child. Planning for your child’s education is not easy since there are many aspects to consider but if you are interested in a savings plan you should learn more about RESP. First of all, this education savings plan is of two types: individual and family and you can opt for a plan with just one child as beneficiary or for a family plan which allows more beneficiaries. ...
... If you are a Canadian resident and you have a Social Insurance Number you can qualify for a Registered Education Savings Plan.

RESP accounts have no annual limits as far as contributions are concerned; however a parent can contribute during his lifetime with maximum 50,000$ per child. Registered Education Savings Plan contributions are not tax deductible and when you withdraw funds from this education savings plan, any funds that represent growth or grant money become taxable, but the tax is minimal. There is also the possibility for your child not to want to continue his education after high school and for such circumstances there are some specific rules. First, if you have other beneficiaries of the plan, RESP can be transferred to that child. Also, any initial education savings plan investments can be returned to the subscriber and if you have an individual plan with no other beneficiaries you can transfer the funds for yourself or donate the income to a Canadian educational institution.

Registered Education Savings Plan is quite popular in Canada, a country where education does matter and where parents strive to ensure a high-quality future for their children. Furthermore, to encourage parents to opt for RESP, the government pays a CESG of 20% of annual contributions for each child and it also provides an incentive which is meant to help families contribute to resp, up to a maximum of $7200 contribution per child. These government incentives and the tax advantages make resp an attractive solution for saving for your child’s education.

Do you want the best education for your child and you want to make sure you can afford it when the time comes? Are you interested in saving money for the education of your children? If this is the case, Registered Education Savings Plan. With RESP saving for college is no longer a difficult process.