A registered education savings plans in Canada is of great help for parents and grandparent who wants their children to pursue higher study. It is wise to know in depth about this plan as you can also benefit from such a scheme. If you visit us at Punjab Insurance Inc, Gurinder Chahal will explain to you in detail and also help you to get introduced to the plan.
The working nature of this saving plan
It is possible to have a tax-deferred growth for supporting the cost of post-secondary education of a child through an RESP account. The government will also contribute a 20 % match to a maximum of $2500 per child yearly. This implies that you can have a $500 Canada Education Savings Grant every year without any contribution from your side. Furthermore, if you are from a low-income family, you can expect a 40% matching donation from the government. So, money will never be a hindrance to your child’s studies.
It is possible to invest the RESP funds in varied ways. You can invest it in low-risk GICs or high-risk stocks and mutual funds. It is also possible to invest in stocks if the child is young. This is possible because RESP will have enough time to recover if there is an initial loss. If you are with us, Gurinder Chahal will help you understand the best possible way to invest according to your scenario.
The method to open registered education savings plans
Opening an RESP account at almost every financial institution and investment organization is possible. It is easy to register for RESP. You will only require a SIN number for yourself and your child to open such an account. It is also necessary to bring the Canadian birth certificate of the child or a Permanent Residency card.
It is not that you require to start depositing funds right away. It’s a brilliant idea to have the account established, even if you can’t deposit immediately. You can set up an automatic monthly contribution from your bank and deposit $ 100 monthly. This small amount and government funds will create a substantial amount when your child needs it for studies.
Who can contribute to the RESP account
It is not that only parents have permission to deposit funds in the account. Any family member or well-wisher can deposit funds and help the child to have substantial money for studies.
How to withdraw from the account
Only the person who has set up the account can withdraw money from it. There are some restrictions and norms to follow, which you can better understand when you are with us.
If it so happens that the RESP is not used. Then it can be transferred to the parent’s RRSP. The plan needs to close by 35 years. So, even if your child starts late, they can benefit from using the RESP.
So, do remember us at Punjab Insurance Inc when you need assistance regarding registered education savings plans in Canada