What is a Registered Education Savings Plan?
The Registered Education Saving Plan is a tax-free plan which is set up to benefit the post-secondary students. This plan was sponsored by the Canadian government. This tax-sheltered plan encourages and helps parents to save for the post-secondary education of their children. An RESP account can be open up for children under the age of 21. The maximum contribution for each child is $50,000.
RESP Plans Offered by Gurinder Chahal Insurance Specialist
Gurinder Chahal Insurance Specialist offers you three different Registered Education Saving Plans each of which have a different structure. You can consult us to choose the best and the most appropriate plan for you and your family.
The individual RESP has only one beneficiary. The beneficiary of this plan can be replaced if the new beneficiary is related to the subscriber by blood or adoption. This plan is perfect for parents who have only one child. However, parents having more children can also set up individual plan for each child separately.
Unlike the individual RESP, family RESP can posses more than one beneficiary. The beneficiaries must have blood relation with the subscriber of the plan, however, they can also be the adopted children. If you have appointed more than one beneficiary than you can earmark your contribution to each beneficiary. It is up to you how much contribution you want to allocate for each beneficiary. Parents having two or more children can set up a family plan or individual plans for their children. You can consult Gurinder Chahal Insurance specialist to know which plan best suits you and your family.
A group RESP works totally different from the family and individual plans. It has different rules. In this type of plan there are different members who contribute for the children of same age group. Thus the money you invest is pooled with the money put in by other investors. When the children get enrolled in post-secondary education, they get an equal amount of money which depends on how much money is in the account. The payment is basically divided equally among all the children whose parents have invested in the Group RESP.
Things to Know about RESP
- Within an RESP the money you contribute and invest grows tax-free.
- With different education grants, the government adds from 20% to 40% every year to your savings.
- You can open an RESP for children under the age of 21.
- Different investment options are available for RESP.
- Mutual funds
Some of these plans help you decide how to invest your savings and some of them can even invest your money for you. Gurinder Chahal Insurance Specialist can help you navigate through the wide range of investment options available.
- Once your child is enrolled in post-secondary education, he starts receiving money from the RESP to cover his educational expenses.
- The lifetime contribution limit for each child is $50,000.