Enter your keyword

Services

RESP

    portfolio

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

Any savings that remain in your RESP when it closes will be handled as follows:
The interest earned on both the personal savings as well as any government grants or bonds will be returned to you if any of the following apply:
  • 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.
In this case, the money withdrawn is called an Accumulated Income Payment. When withdrawn, the money will be taxed at your regular income tax rate, plus an additional 20 percent. You may also transfer it into your Registered Retirement Savings Plan (RRSP) or your spouses RRSP.

When an beneficiary does not continue their education after high school

If the child chooses not to continue their education after high school, you can wait a while to see if they change their mind. RESP accounts can stay open for up to 36 years. If you are sure the beneficiary will not be using the money in the future, you can transfer the money from one RESP to another.

Yearly and lifetime RESP contribution limits

From 2007 to present:
  • no annual contribution limit;
  • lifetime contribution limit: $50,000 (including all contributions made prior to 1998).
While there are currently no annual contribution limits, you can receive the Canada Education Savings Grant (CESG)only on the first $2,500 in contributions per year, or up to the first $5,000 in contributions, if sufficient carry forward room exists. Any contributions over and above these amounts will not receive any CESG for the current year or any subsequent years. All contributions exceeding $50,000 limit will not attract any grant even if the maximum $7,200 of grant is not reached.

Contributions

Some types of RESPs have no minimum deposit requirements, while others do.

Frequency of contributions

Every RESP is different.
  • some types require specific monthly contributions;
  • others let you put money into your RESP account whenever you want.
The sooner you start to save, the sooner you will be earning interest, and the more your money will grow.

CESG grant room (carry forward)

As of 1998, grant room (unused basic CESG amounts) accumulates until the end of the year in which the child turns 17 even if he or she is not a beneficiary of an RESP. Unused basic CESG amounts for the current year are carried forward for possible use in future years, provided the beneficiary remains eligible.

Summary of limits for education savings

Annual Contribution limit required for basic CESG (annual limit) and annual maximum CESG
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)

 

Maximum amount of Additional CESG by net family income of primary caregiver (2015 levels)
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

There is no limit on the number of plans from different institutions one individual can have in his or her name, but there is a lifetime contribution limit of $50,000 per beneficiary. This limit includes all contributions made in all RESPs combined.
CESG payments are made to a single plan on a first-come, first-served basis. For example, if you contribute the entire $2,500 through one RESP provider onJanuary 15, and later put in a subsequent $2,500 through a different provider on February 15, the CESG will be deposited into the first plan you contributed to. When contributions are made on the same date the amounts are split in half between two plans, each plan receives one half of the CESG.
If you contribute through monthly instalments, the CESG is paid into each plan until either the maximum grant that can be paid in a year, or the lifetime contribution limit, is reached.

Naming a replacement beneficiary

You may change the beneficiary named on an individual, family or group RESP.
As with opening any RESP, the new beneficiary’s Social Insurance Number (SIN) must be provided.

Adding another child to an RESP family plan

If you wish to add another child to an existing RESP family plan, the child must be related to you by blood or adoption, and he or she must:
  • 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.
As with any RESP, you must provide the new beneficiary’s SIN to the RESP provider.
If the Canada Education Savings Grant, Canada Learning Bond has already been paid into the RESP, you can add a brother or sister of the existing beneficiary to the plan without penalty.
If you add a beneficiary who is not a brother or sister of the beneficiaries already named on the plan, you will need to repay the grants or bonds to the Government of Canada.