Invest in your child's future. Tax deferred savings plans for your Children's Education.

What are RESPs?

There’s no doubt about it, understanding all the aspects of Registered Education Savings Plans can be hard. To have an RESP that does what it’s supposed to, these four people and organizations need to work together:

The plan-holder,
The plan-holder’s financial advisor,
The government,
The company that sells the plan

Despite the complexity, RESPs are probably the best way to save for your children’s post-secondary education.  Why?

There are two basic reasons:

Grants from the government – Yes – FREE money from the government to help put your kids through school, and
The power of investment growth over long periods of time.

A few facts about RESPs:

You contribute money to a savings plan and the federal government adds a grant of 20% of what
         you put in, up to $400 per year for each child.
The maximum you can contribute per year is $4000 per child. The government gives the grant on
         the first $2000.
If you miss a year or two, or don’t put in as much as you want, you can catch-up on your contributions
         (and the corresponding grants) later.
Single plans can stay open for 25 years - 21 years paying in to save and four years paying out to fund
         an education. Family plans can be open 25 years, but you can only contribute to age 21
         of the beneficiary
         or 21 years, whichever comes first.
The government grant is available until the end of the year a child turns 17, making the lifetime
         maximum $7200.
Your child is taxed on the earnings and grant taken from the plan for school. Generally, with all the
         deductions available to students, the money will be taxed at a very low level or not at all.
If your child doesn’t go to a post-secondary school, you have some attractive options for what you do with
         the investment earnings.
A Social Insurance Number is required for each child you are saving for at the time the plan is established
         in order to register the plan with the government.