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.
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, financial assistance, or having to refinance student loans. 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( lifetime contribution limit per person), and there are no taxes payable on the money earned in an RESP until it’s withdrawn.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.