Mlatezina Insurance Services Inc.
Independant Life Insurance Brokers
Educational Funds
Registered Education Savings Plan
When it comes to your child education, money should not limit your child ambitions. Get more out your money when planning for your child education.
RESP is a special savings account that helps you save for your kid’s post-secondary education. If you are parents, guardians, grandparents, relatives or friends, and you want to save for your child’s or grandchild’s education, you can open a registered education savings plan (RESP) account for them. The sooner you start to save, the sooner you will be earning interest, and the more your money will grow. Even savings of $20 per month can quickly add up, especially when the Government of Canada adds money to your savings.
How it works?
Your child is under the age of 5:
Open an account and put your contribution in the plan.
You can contribute money any time into an RESP up to a lifetime total of $50,000 per child.
Get Canada Education Savings Grant (CESG) of 20% of whatever you put in, up to $500 per year. That's up to a lifetime max of $7,200 per child.
The Canada Learning Bond (CLB) offers up to a maximum of $2,000 for students from low-income families.
Get up to 15 % bonus from the provider (not all providers give this bonus)
Take advantage of RESP provider’s grants to maximize your child education fund.
Withdrawn money when your child starts the post-secondary education.
When money is withdrawn, the educational assistance payment is taxable in the hands of your low-income/no-income child, not you. Since many students have little or no other income, they can usually withdraw the money tax-free.
Your child is over 5 years old:
Open an account and put your contribution in the plan.
You can contribute money any time into an RESP up to a lifetime total of $50,000 per child.
Get Canada Education Savings Grant (CESG) of 20% of whatever you put in, up to $500 per year. That's up to a lifetime max of $7,200 per child.
The Canada Learning Bond (CLB) offers up to a maximum of $2,000 for students from low-income families.
Withdrawn money when your child starts the post-secondary education.
When money is withdrawn, the educational assistance payment is taxable in the hands of your low-income/no-income child, not you. Since many students have little or no other income, they can usually withdraw the money tax-free.
If the child chooses not to continue their education after high school, you can wait a while to see if they change their mind. RESP accounts can stay open for up to 36 years. If you are sure the beneficiary will not be using the money in the future, you can transfer the money to another child or transfer funds from the RESP in to a registered retirement savings plan (RRSP).
You have the option between the two types of plans for your kids:
Group plan: you can have a plan that includes more than one kid. When you open a group plan, you agree to make contributions into the group RESP at set times for the duration of the RESP contract. The RESP provider will credit the money you put into the group RESP to an account in your name.
Self direct plan: you can have a plan for each kid separately and the amount of contribution does not have to be the same for each kid.
If you want more information on RESP, please contact us and one of our advisors will be happy to assist you.
