1. What is an RESP?
A Registered Educations Savings Plan (RESP) is a type of savings account that helps you save for your child’s post-secondary education.
The plan encourages Canadians to save for post-secondary education, by providing tax benefits and government grants. Such grants include: the Canada Education Savings Grant, Canada Learning Bond, and other grants offered by provincial education savings program.
2. How does an RESP work?
There are three parties involved with an RESP: a subscriber, a promoter, and a beneficiary. The subscriber is the person who makes contributions to the RESP (ex: the parent), the promoter is the institution that offers the RESPs and manages the account, and the beneficiary is the person who will ultimately receive the money from the RESP (ex: your child).
Once you’ve opened an RESP – your savings grow tax free (as long as you keep your money in the plan of course). If you’re saving for a child that’s under the age of 17, the federal government will contribute money into your RESP as a grant. Provincial grants are also available and vary by province.
3. Questions for RESP Providers
It’s a good idea to ask these questions before choosing a Registered Education Savings Plan (RESP) Provider.
For more information, please visit Employment and Social Development Canada Website. For a list of RESP promoters, please click here.
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