Every parents wish to do the best for their child. Some of them start planning before their child’s birth. Some parents don’t dare to get a baby so long they don’t think themselves to be financially sound for their baby. They keep on delaying their parenthood. The household expenses and burden of loans does not allow them to save anything for their baby’s future. But, we have a solution for your child’s bright future. RESP is the term associated with your child’s future. You can secure the education of your child in this way.
What is the RESP?
This is an insurance scheme of getting the post-secondary education of your child secured. Normally, such education has a cost ranging from $ 100,000 – $ 200,000. But, you can always get it ready, if you can go ahead with the RESP scheme. We will provide all the guidance to you once you contact us.
Criteria of RESP
There is no much rigidity of RESP criteria. Almost every individual is capable to open an account. Do you have a child? Are you the parent or the parents of your kids? Then you meet the criteria of opening a RESP account. Even it is possible to open such account if you are the other friend or relative of the child. But, there is a place for the beneficiary. This is to whom we will provide the sum after maturity. You can give either your or any other person’s name over here. This scheme has another benefit. Any adult opening this account will be able to earn interest. There will be a tax free facility with this.
More facts on RESP expiry or closure
You should know about what exactly will happen to your money when your RESP account expires. Since it is related to a facility for Canadian residents, it will be returned to the Canadian government if the money is received from Canadian education fund. But, if any person has their individual savings, it will be returned to that respective person. The child for whom the plan was made can take it after they have crossed the age of 21 years.
Different plans option
You may easily get different plans over here. Some of you may be comfortable paying the premiums on a monthly basis. There are some people `who wish to put account whenever they have money. You can start earning interest as soon as you start savings. Try it today and enjoy your kid’s bright future.
What happens to savings in an RESP when it closes/expires
- money received from either the Canada Education Savings Grant (CESG) or the Canada Learning Bond (CLB) will be returned to the Government of Canada; and
- any personal savings in the account will be returned to the person who opened the plan.
- all children named in the plan are at least 21 years old and are not eligible for an Educational Assistance Payment;
- the subscriber is a Canadian resident; and
- the RESP was opened at least 10 years ago.
When an beneficiary does not continue their education after high school
Yearly and lifetime RESP contribution limits
- no annual contribution limit;
- lifetime contribution limit: $50,000 (including all contributions made prior to 1998).
Frequency of contributions
- some types require specific monthly contributions;
- others let you put money into your RESP account whenever you want.
CESG grant room (carry forward)
Summary of limits for education savings
|Period||Contribution required for basic CESG (maximum annual limit)||Annual maximum CESG|
|1998 to 2006||$2,000 ($4,000 with carry forward room)||$800 (20% of $4,000)|
|2007 or later||$2,500 ($5,000 with carry forward room)||$1,000 (20% of $5,000)|
|Net family income of primary caregiver (2016 levels)||Maximum amount of Additional CESG|
|$45,282 or less||$100 (20% of the first $500 contributed)|
|More than $45,282, but not more than $90,563||$50 (10% of the first $500 contributed)|
|More than $90,563||$0|
Number of RESPs you can have
Naming a replacement beneficiary
Adding another child to an RESP family plan
- be under 21 years old at the time you add him or her to the plan; or
- have been a beneficiary of another family RESP immediately before being added to this one.