A parent’s dream is to ensure their child has the best future possible. And the best way to achieve it is to ensure they get a good education. One of the options available for parents is the RESP.

What is RESP?

A Registered Education Savings Plan (RESP) is a dedicated savings plan that can help you save for your child’s education after high school.

While most RESPs are opened for children, it is also possible for you to open an RESP for yourself or for another adult.

When you child enrols in post-secondary education, they can start taking payments from this fund called Educational Assistance Payments (EAPs). EAPs are a combination of your invested money as well as government grant money in the RESP.

Why should you open an RESP?

• Your savings will not be taxed. There is no tax on the investment earnings as long as they stay in the RESP.
• The federal government will also contribute to the RESP savings in the form of a grant or a bond if you open save for a child of or under 17 years of age. In some provinces, the provincial government may contribute as well.
• You can invest monthly or annually contributions up to a lifetime maximum of $50,000 per child.
• While contributions are not deductible, the savings are easily accessible to students through withdrawals called EAPs. Your child can use the money in the plan when they enrol in university, college or any other qualifying education program.
• There are a wide range of investment options available for RESPs. These include stocks, bonds, mutual funds, GICs, etc. Depending on the plan, you can decide how to invest your savings or let the financial experts invest the money for you.
• An RESP can stay open for up to 36 years. For beneficiaries eligible for the disabled tax credit, the plan can stay open up to 40 years under specific plan rules.