Registered Education Savings Plan

The benefits of opening an RESP

Provided that the earnings that you make from investments are not withdrawn from the RESP, you will not pay any tax on them, giving you the opportunity to grow your savings faster.

The Canada Education Savings Grant, established by the federal government, will add to your RESP every year. What’s more, families on lower incomes might also receive money via the Canada Learning Bond. Some provinces, including Alberta, Quebec and Saskatchewan, also offer grants to eligible individuals. The basic CESG is a 20% match on contributions. The CLB is an extra 10% for qualifying subscribers.

Take full control of your children’s future education needs by deciding which investments are best suited to your financial goals. Your advisor will help you figure out which investments are most suitable for you.

A friend or family member is able to set up an RESP for your child.

EAPs or Educational Assistance Payments can be withdrawn by your child if they take post-secondary education but they are responsible for the tax owing on the withdrawals. This can be tax efficient because your child is likely to have little or no income while studying. Therefore the tax burden will likely be lower than if the withdrawals are done in the subscribers name.

There are a few rules to be aware of relating to the time periods that apply to RESPs. For example, if you are eligible for disability tax credit, your RESP account can stay open for a maximum of 40 years. And if your child wants to take a break from studying before returning to complete their education later, they may still be able to use the money invested in the RESP.