Registered Education Savings Plan (RESP)
Securing Your Child’s Education Against All Financial Odds!
A Registered Education Savings Plan (RESP), is an investment plan supported by the Government of Canada that aims to encourage parents to invest in their child’s higher education. It is like a savings plan that would assist in sponsoring your child’s post-secondary education. This tax-advantaged plan allows you to save in a timely manner and support your child to accomplish their professional goals without having to rely on any high-interest student loans.
The authority to open an RESP account for a child is open to all, it could be a child’s parents or guardians, or grandparents, or any other relatives or friends. The contributions to this account can be made for a total of 31 years and expire by the end of 35 years from the time the account was been opened.
The Canada Education Savings Grant (CESG) is the additional money granted by the Government of Canada annually to your Registered Education Savings Plan. This was established by the federal government, to encourage parents to invest in their children’s higher education, at their earliest possible convenience.
You are granted a total of $500 or 20% of your total annual contribution to the RESP, whichever is lower. Your RESP is eligible for
a maximum grant limit of $7,200.
Canada Learning Bond (CLB):
The Government of Canada offers grants known as the Canada Learning Bond (CLB) to support low-income families in starting to save
for their child’s post-secondary education as early as possible.
- Your RESP has completed 10 years of investment since the time you started, and all the beneficiaries under the plan have turned 21 and are not continuing with their higher education.
- Your RRSP has not consumed its investment limit and your RESP plan allows such a transfer.
- The RESP beneficiary has a severe and long-term mental disability that is likely to prevent him/her from pursuing their higher education.
- Your RESP has completed 35 years of its validity or it has been open for a minimum of 10 years since the time you started the investment, and all the beneficiaries under the plan have turned 21 and are not continuing with their higher education.