RESP or Registered Education Savings Plan is an investment plan used by parents to provide for their children’s post-secondary education. It is a plan set by the government of Canada to fund the education of students with major tax benefits. It consists of a $500 grant per year, but, depending on certain thresholds of income, it can go up to $1000. RESP is a surefire way of guaranteeing a secure education for your child.

Opening an RESP account:

It is a very simple process to open an RESP account. It is not necessary for a person to have a bank account. You need to contact an RESP provider first. Almost all banks, financial institutions, and credit unions provide this facility. All that is required is the beneficiary’s birth certificate and social insurance number. The provider can be your one-stop information hub to know about extra fees and opening and closing amounts for the account. One must make sure to have all information relating payment and procedure before opening an RESP account.

Choosing the right plan:

After we have opened the account, we must decide what kind of plan would be most beneficial for us. Anyone can open an RESP account, even the grandparents. There are three kinds of plans from which we can choose. An individual plan enables you to pay for any student’s education and they need not be related to you. A family plan, on the other hand, benefits blood relatives, siblings, half-siblings and step-siblings. There is another plan called the group plan which is a way to pool money from different investors. The plan must be chosen according to the number of people who are to be benefited and also on the income of the investor.

Non-usage of funds:

Sometimes the funds in the account are not used completely or partially. In such cases, the following can be done to utilize the funds or withdraw them:

1. Transfer to RRSP account
2. Utilize for another beneficiary
3. You can also withdraw the money if all beneficiaries linked to the account are over 21.