Registered Education Savings Plans
A Registered Education Savings Plan (RESP) is a special savings account for parents who want to save for their child’s education after high school.
How an RESP works
- A subscriber enters into an RESP contract with the promoter and names one or more beneficiaries under the plan
- The subscriber makes contributions to the RESP. Government grants (if applicable) will be paid to the RESP. These grants can be the Canada Education Savings Grant (CESG), Canada Learning Bond (CLB), or any designated provincial education savings program
- The promoter of the RESP administers all amounts paid into the RESP. As long as the income stays in the RESP, it is not taxable. The promoter also makes sure payments from the RESP are made according to the terms of the RESP
- The promoter can return the subscriber’s contributions tax-free
- The promoter can make payments to the beneficiary to help finance his or her post-secondary education
- The promoter can make accumulated income payments
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Benefits of an RESP
Open an RESP for no charge and pay no annual administration fees at Envoier Financial Ltd.
Tax Sheltered Growth
Earnings within an RESP are not taxed. When the funds are taken out for education, withdrawals are taxed in the student’s hands, often resulting in little or no tax.
Get Government Contributions
Grow your savings faster with the Canada Education Savings Grant (CESG)1, Canada Learning Bond (CLB)2, and other government incentives.
Built-In Flexibility
If the child doesn’t pursue post-secondary education, you may be able to choose a new beneficiary. Or, if he or she wants to travel first, you have 35 years to use the funds.
How much can I contribute to an RESP?
You can contribute any amount to an RESP, subject to a lifetime limit of $50,000 per beneficiary. You can contribute to an RESP for up to 31 years, and the plan can remain open for a maximum of 35 years.
What investment options are available for RESPs?
RESP can hold a variety of investments, including Guaranteed Investment Certificates (GICs), mutual funds, portfolio solutions and savings deposits. You can also hold stocks and bonds.
How do I contribute to my RESP online?
Once you have opened an RESP, you can make additional contributions online if you have Online Banking access.