The Registered Education Savings Plan, or RESP, can help you save for your child or grandchild’s education. And whatever you contribute, the federal government will match 20%. For example, if you put $1,000 into an investment earmarked for an RESP – the government will give you $200 to add to the plan. All of the earnings on an RESP are sheltered from taxes until the student withdraws the money and is required to pay income tax on the withdrawals.
- RESP funds can be used for any accredited school – including most universities, trade schools and colleges and accredited religious colleges
- The government’s grant only applies to the first $2,500 of contributions per year – i.e. the yearly maximum matching contribution is $500
- Anyone – parents, grandparents, aunts, uncles and friends – can contribute to an RESP
- With a family RESP, parents can invest for several children within a single plan
- Upon withdrawal, the RESP funds can be used for tuition, books, fees and living expenses
- You can start an RESP for any child who is under the age of 21
- You can put a wide variety of investments in an RESP
- Note that the RESP recipient will need a Social Insurance Number in order to qualify for the program
Put the advantages of post-secondary education within the reach of your child. The grant money is available right now, but the initial investment begins with you.