What You Need to Know About RESPs

Parents, have you had a chance to open an RESP account for your child? Bellow, you’ll find what you need to know about RESPs.

An RESP (Registered Education Savings Plan) is a tax-sheltered plan that helps you save for your child’s post-secondary education. You can set up an RESP for an eligible beneficiary child under the age of 18 and make regular contributions to it.

What You Need to Know About RESPs

Setting up and contributing to an RESP account as soon as your child is born, is the best gift for their future. If they decide to pursue higher education, they can focus on their studies and not worry about tuition financing. Imagine the freedom you can give your child and how rewarding it will feel for you

You can contribute up to $50,000 per child ( lifetime contribution limit per person), and there are no taxes payable on the money earned in an RESP until it’s withdrawn.  Any withdrawals from an RESP account are then taxed in the hands of the student, and that usually means they will pay little or no tax.

RESPs are registered by the Government of Canada and through the Canada Educations Savings Grant (CESG) you can get up to $500 a year in government grants for a total of up to $7,200 (the government will match 20% of the first $2,500 contributed each year for eligible children)

Looking for a place to open your RESP with? Questrade offers RESPs, and this site has a great Questrade review if you want to do your research beforehand.

My husband and I set up our children’s RESP accounts right after they were born. We have it set up with automatic contributions so we don’t even have to think about it. And since the government matches 20% of your contribution that means the money just adds up.

Do you have an RESP account set up already? If you don’t, don’t wait any longer! Remember it is super easy to set up and you are investing in their future.

 

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Angela V

Founder and Writer at One Smiley Monkey blog
Hi, my name is Angela and I am a Canadian mom living in Vancouver with my wonderful husband and two happy little boys. I am the founder and primary contributor behind One Smiley Monkey. Welcome to my blog!
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7 responses to “What You Need to Know About RESPs”

  1. Tammi L. — May 11, 2018 @ 5:54 pm (#)

    We just set up a very small one for our daughter a year ago and I’m regretting it now as she is already 15 and my husband just retired so with a limited budget we can’t up it. It is so wise to start early even if it is small amounts.

    Reply

  2. kristen visser — May 12, 2018 @ 4:28 am (#)

    This is what hubby and I need to do ! so important. I know you can set one up anytime but sooner the better

    Reply

  3. Carole D — May 14, 2018 @ 8:39 pm (#)

    Great information! My granddaughters have one and my daughter put all they brithday money ect.. in it. It all adds up!

    Reply

  4. kristen visser — May 15, 2018 @ 11:53 am (#)

    This is so important! we actually still need to set one up for our daughters. unfortunately we do not have one in place yet but we definitely will be. I know what its like getting into debt with my schooling because my parents never had one in place for me. I dont want that with my girls too

    Reply

  5. Calvin — May 16, 2018 @ 11:28 am (#)

    Don’t know too much about the RESps, I know my parents have one for me, good info

    Reply

  6. Angela Hatten — May 18, 2018 @ 9:37 am (#)

    I love this very informative especially for those Looking to isecure young ones future. Thank you

    Reply

  7. LisaM — May 19, 2018 @ 5:30 am (#)

    We opened an RESP for our son’s first birthday. All the monetary gifts went (and continue to go) right in there.

    Reply

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