What is RESP?
RESP or Registered Education Savings Plan is a safe investment option for people in Canada. When you want to invest money for your child’s future education, there is no other plan like this. Similar to RRSP or Registered Retirement Savings Plan, RESP also removes the tax burden for your investments.
Canadian Government also provides CESG or Canadian Education Savings Grant that is equivalent of 20% of the amount that you invest every year. CESG is subject to a maximum of $500. This grant is provided as an incentive to encourage more people to save and invest money for the future of their children. The underlying purpose of RESP is to fund your child’s college education. So, if your child is not pursuing college education, then the 20% of the investment that the Canadian government had contributed will be taken back. Invest in RESP today.
Why You Need to Invest in RESP?
You need wealth to meet your future expenses and unexpected expenses without being worried about the money. That is why, you have to invest in safe options that are assured to give you income. When it comes to funding the college education of your kid, RESP provides many unique benefits. It ensures good education of your child and provides them with a life full of opportunities.
So, what are you waiting for?
Do Something Today That Your Child Will Thank You For
Advantages of RESP
If you’re still undecided about investing in RESP, then read the following unique advantages of RESP.
- Your investment gets tax exemption. It is not taxed on growth as long as it remains in the account.
- Your investment gets a boost of 20%, subject to a maximum of $500 per year, in the form of a grant from the Canadian government, Canadian Education Savings Grant.
- Ability to invest in a number of avenues like mutual funds, stocks and other investments.
- The tax during withdrawal will be marginal when compared to what you have to pay today, as the tax burden is shifted to the future and also from the person with a higher tax bracket (you) to the one in the lower bracket (your child).
Types of RESP?
Depending on the nature of the beneficiaries and benefactors, RESP is generally categorized into the following three plans.
- Individual RESP Plans
- Family RESP Plans
- Group RESP Plans
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