What is a RESP?
With tuition fees and the cost of living rising each year, it makes sense to start saving as soon as possible for your child’s post-secondary education. A Registered Education Savings Plan (RESP) is a savings account specifically designed to help you save for your child’s higher education by providing several financial incentives. As the subscriber, you can contribute up to $50,000 per child to a RESP over the lifetime of the plan (the annual limit was eliminated last year). Unlike a Registered Retirement Savings Plan (RRSP), contributions to a RESP are not tax deductible. However, savings within the plan grow tax-free until they are withdrawn for education purposes by the beneficiary. They are then taxed in the beneficiary’s hands, which could mean there may be no taxes to pay if the student is in the lowest tax bracket at the time. One of the benefits of opening a RESP is the Canada Education Savings Grant (CESG). The Canadian government helps you save for your child’s future by addi
Related Questions
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