Understanding Registered Education Savings Plans In Canada

If you live in Canada and you have children, it is going to be in your best interest to take the time to look into an heritage RESP, or Registered Education Savings Plan. Basically, this is a way for you as a parent to help save money for a college or university education for your child. These are expenses that are consistently going up every year and there are more and more parents who wonder exactly how they are going to meet such high tuition costs. Overall, an RESP as Ask onlineĀ  agencies can be an incredible way for you to help save money and to start planning as early as possible for the continuing education of your child(ren).

An RESP is basically a savings method in Canada that will allow parents the means for saving for the costs that are associated with a post-secondary education. The income from an RESP is taxed once it is in the hands of the child, so there ends up being very little income tax that needs to be paid on the interest. The principle is then refunded tax free to the parent, or contributor, once the plan matures.

Each child in Canada is actually eligible to get a 20% grant from the government that can boost their RESP, which is known as the CESG or Canada Education Savings Grant. For every $100 that a contributor puts in, the Canadian government will add $20 to it. If you are a lower income family, you will also be able to receive an additional 40% bonus to make the savings for the child even greater.

To make this education savings plan even better, there is never any yearly contribution limits. After a child reaches the time when they qualify for either part time or full time education, their family members are then able to contribute to their fun. This makes it a perfect gift when it comes to special occasions such as birthdays, Christmas and more.

If you are a parent or an adult who would like to contribute to the future of a child in your life, all you have to have is the social security of the child as well as a quality heritage RESP provider. Once you have a provider that you would want to work with moving forward, you have the ability to change the life of a child and make it easier to get the education that they are looking for in the future.