Registered Education Savings Plans (RESPs)
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RESPS are probably the best way to save for your child's post-secondary education.
Why? Because of government grants and the power of long-term investing.
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Here are a few facts:
- Parents, grandparents and friends can contribute money to an RESP – to a lifetime total of $50,000.
- The federal government adds a grant of 20 to 40% of what you put in, up to $500 per year for each child. Contributors with a lower family income receive a higher grant.
- Details on the grant (the Canada Education Savings Grant) are available from the federal government at: http://www1.servicecanada.gc.ca/en/goc/cesg.shtml
Types of Registered Education Savings Plans available
Family RESP plans
- One or more children can be named as beneficiaries, but they must be related to you.
- Children, grandchildren, adopted children and stepchildren are fully eligible.
- If the older children don't go to school, the grant money, under certain circumstances, may be transferred to other beneficiaries.
- Payments don't have to be split evenly between children.
Individual RESP plans
- Can be opened by anyone -- the planholder doesn't have to be a close relative.
- There are no age limits, so you can set up an RESP for yourself or another adult.
In both types of Registered Education Savings Plans the planholder fully controls:
- how the money is invested, and
- the payments to the child.
For more information, please visit www.ci.com .
