Registered Education Savings Plan
Life insurance is one of those things people don’t like to think about. But it can make a big difference in the lives of those you love.
What is RESP?
An RESP is an Education Savings Plan registered under Canada’s Income Tax Act, which is established for the purpose of providing financial assistance to a Beneficiary (usually a child) when he or she pursues a post-secondary education. Income on savings within an RESP grows tax-sheltered until the child is ready for a post-secondary education. The earnings are taxed in the hands of the student, who typically pays little to no tax. In addition, RESPs may qualify for various government incentives that help parents, relatives and friends save for a child’s post-secondary education. Subscribers and Beneficiaries enrolled in an RESP must have a valid Social Insurance Number. Beneficiaries must be Canadian residents each time a contribution is made to an RESP.
Why do you need RESP?
There are several reasons why you need RESP. Here’s a few reasons:
- You can rest easy knowing that when it comes time to pay for a post-secondary education for your child, you’ll be in a better position to afford it
- You will benefit from the power of compound interest working for you and your child immediately
- Your child’s Plan will benefit from the Canada Education Savings Grant and may benefit from other government education savings incentives that you may qualify for, providing your child resides in Canada and has a valid Social Insurance Number
- With RESP, contribution protection for eligible contributors commences as soon as you enroll with the optional insurance coverage