An RESP is a Registered Educations Savings Plan. The plan is used to finance the education of children in the country of Canada. The government pays a portion of the total amount pitched in by the parents. This RESP plan could be highly beneficial in financing the dreams of your children and removing finances as a barrier from them pursuing their educational goals. Opening an RESP account has its benefits but opening one early could actually let you add to the already existing list of benefits. Here are a few of them:
- The government pays a portion: Nobody says no to free money! The government contributes to the RESP account and pays a significant portion. This portion is pre-determined and is considered to be quite a big contribution. The government contributes a fixed percentage of the total amounts you contribute to the account. This could help you to build up your entire savings for your child thereby making a huge difference in their education plans.
- Longer time to save: The RESP can enable you to accumulate a large amount of money for your child’s education if you start early. This amount can help you when you are faced with the task of paying the fees in one single installment. This would also make you burden free when it comes to financing the education of your children. The amount will be significantly large enough to support your child and make sure finances are not a barrier.
- Enough for more than one: If you start saving early, you might even have a large enough amount to fund the education of more than one child. This could prevent you from stressing over the second one after finishing the education of your first child peacefully. The earlier you start, the more you are likely to collect. This could make you completely burden free when it comes to education and you can know you have done your best for them.
- Your child does not have to take a loan: It is great for children to learn responsibility but why should they be burdened with a student loan before they have even started their education? If you save early, you can save enough with RESP for your children’s education so that they do not have to take a student loan and can pursue their education with full concentration and without the future payments clouding their present educational goals.
- Tax-free savings: Imagine how it would feel like to have a huge amount sitting in your account which is tax-free? That is how well you will be rewarded when your RESP account shows a huge a balance because you saved early. The account can also help you to fund big expenses in the case that neither of your children wants to pursue an education. It can serve as a good place to fall back on. The funds you have installed in the account will be returned to you based on certain conditions.