With the summer ending and fall here, schooling and education tends to be top of mind for many families. With the rising costs of post secondary education, many families wonder how and when to start saving. It can be difficult for students to cover post-secondary expenses from their earnings alone, which are usually very limited. That’s where a Registered Education Savings Plan (RESP) comes in handy.
An RESP is a great savings tool that anyone, (parents, grand-parents or friends — can open to help pay for a child’s post-secondary education. The life-time deposit limit is $50,000. The child can access the funds when he or she has enrolled in a full-time, qualified post-secondary educational program. In terms of taxes, RESPs are tax-deferred and not tax-deductible. The growth and the grant portion of the withdrawals would be considered income for the child. But as a student, they may not be required to pay any tax since they would be in a low- or no-income bracket.
The RESP is now part of CEIRP. To learn more, click here to access the RESP page on our website.