RESP Investments in Canada
The Canadian Government recognises the importance of getting a higher education in this competitive age and has set up different programs to help pay for them, including the Registered Education Savings Plan.
Your Exempt Market Dealer will help you through all the steps to ensure your investment yields satisfactory revenue.
Saving for a Better Future With RESP Investments
A Registered Education Savings Plan or RESP is an investment plan designed to help you save for post-secondary education. While most RESPs are dedicated for children, you can also set up one for your or another adult’s higher education.
There are two types of RESP, namely:
- Family Plan – for more than one blood related or legally adopted beneficiaries
- Specified Plan – for only one blood related or legally adopted beneficiary
Subscribers (persons who open the plan) can invest whenever they want, up to a lifetime maximum of $50,000 per child. While the contributions are not tax-deductible, they can be withdrawn by the subscriber tax-free from the plan at any time and for any reason. However, any Governmental grants made on those contributions must be paid back.
The income earned on the RESPs are paid to students as educational assistance payments (EAPs).
You can set up an RESP for your yourself, your children or other adult relatives
RESP – Making Higher Education Accessible to Everyone
Subscribers can set up RESPs for up to 40 years if the beneficiaries are eligible for the disability tax credit and up to 36 years for everyone else. One of the main advantages of an RESP is that it gives the beneficiaries access to the Canada Education Savings Grant (CESG), Canada Learning Bond (CLB), and any other designated provincial education savings program.
RESP holders can choose to decide how to invest their savings or they can give the promoters the liberty to invest the money for them. Investment options for RESPs include stocks, bonds, mutual funds, qualifying alternative investments, guaranteed investment certificates (GICs), and more.
In case students choose not to attend a post-secondary institution, any accumulated interest may be withdrawn by the subscribers as Accumulated Income Payments (AIPs). These are taxed as income unless they are rolled into a Registered Retirement Savings Plan (RRSP).
You can choose to invest on your own or let your Exempt Market Dealer do it for you
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