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Services
Registered Education Savings Plan
Today's Registered Education Savings Plans (RESP's) are better than ever. While your contributions to the plan are not tax-deductible, contributions may qualify for the Canada Educations Savings Grant and the earnings grow tax-free. You decide the type of investment you want and there is no foreign content restriction as with RRSP's. You can name anyone as a beneficiary, including yourself and you can have more than one beneficiary by setting up a family plan.
Here's how it works:
- You can contribute up to $4,000 each year ($42,000 lifetime maximum) per beneficiary to the RESP; contributions are not tax deductible.
- Contributions to the plan may qualify for the Canada Education Savings Grant (CESG) - an annual top-up of 20% of your RESP contribution to a maximum of $400 per beneficiary per year.
- All interest, dividends and capital gains compound tax free in the plan until withdrawn.
- You choose the investments ... no foreign content limits.
- When the earnings in the plan are withdrawn while the beneficiary is attending an approved post secondary institution, the beneficiary pays tax on the earnings at his or her (presumably lower) tax rate.
- You can make contributions for up to 21 years (individual plans only), however both individual and family plans can exist for up to 25 years.
- Plans can be opened with an initial contribution as low as $100.
- If a child does not attend college, the earnings may be transferred to another beneficiary or the plan can be transferred into your RRSP (assuming you have the contribution room and less the CESG)
- Specific eligibility rules apply to beneficiaries 16 years of age and older in terms of their eligibility for CESG.
If you would like to receive some information about Registered Education Savings Plans or speak to someone personally about your overall financial plan, simply use the Contact Us page.
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