RESP Registered Education Saving Plan

A registered education savings plan (RESP) is a financial vehicle that is specially designed to build up savings for a child’s postsecondary education. The amounts accumulated in an RESP are intended to cover the tuition fees and all education-related expenditures, such as housing, school supplies, food, transportation expenses, etc.

 

As is the case with the registered retirement savings plan (RRSP), the federal government permits the investment income from an RESP to grow in a tax shelter as long as it is not withdrawn from the plan. Clearly, the RESP is to education what the RRSP is to retirement.

 

In addition, to encourage parents to invest in the postsecondary education of their children, the federal government will provide a grant corresponding to 20% of the annual contributions paid into the plan, up to a maximum of $500 per year, per beneficiary. The lifetime maximum grant paid per beneficiary cannot exceed $7,200.

Increasing Your Savings Through the Canada Education Savings Grant (CESG)

 

The Canada Education Savings Grant Program, established by the federal government, aims to encourage parents to invest in the postsecondary education of their children.

 

This grant corresponds to 20% of the annual contributions paid into an RESP, up to a maximum of $500 per year, per beneficiary. The lifetime maximum grant paid per beneficiary cannot exceed $7,200.

 

The grant amounts received accumulate tax sheltered in the RESP. During the beneficiary’s postsecondary education, these amounts will be added to income paid in the form of educational assistance payments. The CESG does not affect the allowable contribution limit per beneficiary.

 

We can help you to start Segeregated Fund RESP

 

© 2015 KYCfinancial.com