Registered Education Savings Plans (RESPs)

A savings plan for a child or grandchild’s future becomes increasingly important as the cost of post-secondary education continues to increase.

RESPs offer an effective way to maximize the money available to your children or grandchildren when they enroll in a full-time post-secondary program. 

The savings advantage

Although contributions are not tax deductible, the money within the plan grows tax-free until your child or grandchild withdraws it.

The federal government offers the Canada Education Savings Grant (CESG), which increases savings even more.

The government provides a 20 per cent grant on the first $2,000 you contribute each year, until your child turns 17.

The maximum grant is $400 per year, for a lifetime maximum of $7,200.

RESP details

The contribution limit is $4,000 per year with a lifetime contribution limit of $42,000 per beneficiary.

You can make contributions each year for up to 21 years.

There are two types of plans:

Individual plans accommodate one beneficiary.

Family plans allow for more than one beneficiary, so you can add siblings.

For more information on RESP plans and how they might be right for you contact Barrons for more information today