Registered Education Savings Plan (RESP)
What is RESP? It is a special savings account registered with the Government of Canada to help you, your family or friends saving early your child’s education after high school.
The money in the RESP will be invested so it can grow and earn interest.
You will not be taxed on the interest, and your child can usually withdraw the money tax-free. Any money that you, your family or friends put in the RESP is also eligible for the Canada Education Savings Grant. The Canada Education Savings Grant could add up to $200 on the first $500 you save annually, and up to $400 on the next $2,000. Even savings of $5 a week can make a difference, especially when the Canada Education Savings Grant is added. That money will also earn interest over time. The sooner you start to save, the more your savings will grow.
To be able to get your child a cover under RESP, a beneficiary must meet the following requirements:
Be a resident or Citizen of Canada
- Social insurance number (SIN)
Type of RESP’s:
Individual Plans: In this plan, it names one beneficiary. You can invest the money on your own or if desires, with the help of a financial advisor. Relation of the beneficiary to the subscriber is not important. The beneficiary does not have to be related to the subscriber. The beneficiary can be over 21 when named.
Family Plans: In this plan, it allows one or more beneficiaries to be named in the RESP. The beneficiaries must be under 21 when named. The beneficiary should be related to the subscriber by birth/blood or adoption. In case if one beneficiary decides not to pursue schooling, other beneficiaries can use the same money. This plan do not need any monthly payment, allowing you to invest the money on your own or with the financial advisor.
Pooled (group) Plans or Scholarship Trusts: In a pooled (group) plan, the fund is gathered from many families. The RESP administrator teams the contribution and put them in investments that earn a fixed rate of return. The earnings are shared equally among beneficiaries contributing in the plan. Monies from the fund are paid out in the form of scholarships to eligible students while they attend post-secondary education. Choose Ravinderjit Basra or Harpreet Saini as your RESP provider and know more about the choices you have and the best plan suitable for you and the bright future of your children. To get more detailed information about RESP and its benefits fill the form and get a free no obligation quote today! You can also contact us.