What Is RESP and How It Work?

What Is RESP and How It Work? - Harpreet Puri

(RESP) Registered Education Savings Plan is an investment plan that help you to save for your children’s secondary education. This particular plan is only for the parents and grandparents of a child residing in Canada. 

As a parent or guardian, you can open an RESP account for your child at any time before your child turns 18 years. By investing in an RESP, you can get access to the Canada Education Savings Grant. Our team can help you create your RESP investment account. To know more about our services, speak to a member of our team now, we will be happy to help you with all your requirements.  

Benefits of opening an RESP account

There are several benefits of investing in an RESP account, they are: 

• The amount saved in the RESP account is not taxable

• This account can stay open for up to 36 years

• Your child is free to make money and enroll in any college of his choice

• You child can also choose an education program of their choice.

• Several investment options available for RESPs, includes stocks, bonds, mutual funds, GICs

Why should I open an RESP account?

Saving for your child’s future is essential and is a huge responsibility. Today’s education, certification courses and college can cost you dearly. Investing in your child’s education is a wise choice to make. RESP plan is a flexible and tax-deferred plan that can provide you assistance to manage your child’s higher education. RESP account will get grants from the federal and provincial governments help so when they are 18 years old you pay for over 40% of your child’s fees. For more information, get in touch with us today. 

Other points to remember

• Canadian government caps the lifetime contribution limit of $50,000 per child. 

• In case your child does not pursue post-secondary education within 36 years, the government will request the money back.

• If you withdraw money from the RESP account and use it for other purposes, heavy penalties are involved.

Tax-free solutions

The Registered Education Savings Plan (RESP) can provide you with an opportunity not to pay taxes on the money saved and also get bonus money from the government for your child’s education in the process. 

Are you looking to invest in a Registered Education Savings Plan (RESP)? Please call Harpreetpuri now. We will be happy to help you with all your requirements.