Registered Education Savings Plan

RESP (Registered Education Savings Plan)

A program offered by the Government of Canada. The purpose of RESP is to help individuals or families save and rasie money for their children’s education. You can apply for an RESP at most banks. The banks offer a variety of financial instruments such as, mutual funds, bonds, GICs etc. The money contributed and earned in the savings account will not be taxed. Although it is not tax-deductible either. When applying for an RESP, you must choose a beneficiary. The beneficary can be you child, grandchild, nephew or neice. You may contribute a total of $50,000 per beneficiary. If the child is under 17, it is recommended that you apply for the CESGS (Canada Education Savings Grant). The CEGS will grant 20% of every dollar, for the first $2,500 each year. You cannot apply for the CESGS yourself. Your RESP provider must apply on your behalf. An RESP is a great way to make education saving easier.

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