Can I set up RESPs for my Kids

What is RESP

RESP is known as Registered Education Saving Plan is a is an effective way of financial saving for your
child post their secondary education. And if you want to secure your child’s education in the future, then this is the best opportunity.

Who can Contribute to an RESP

In this scheme parents, grandparents or relatives of a child can contribute their money any time to an
RESP with a total of up to $ 500. And these contributions are non-tax deductible. And any investment
income which is earned within the RESP plan is not taxed until the withdrawal process.
Another benefit of this plan is that you can also get the benefit of CESG, which is known as Canada
Education Saving Grant. In this system, you will get a contribution of 20 percent of your investment in
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RESP by the Federal Government.

The total amount of this CESG is around $7200 for each child in the lifetime. And one of the ironic things is if your income is on the lower side, then there is a chance of getting more than the above amount as well. The CESG amount comes directly into your child’s RESP.
Therefore, with an RESP, you can make sure about your child’s higher education, and you don’t have to be worried in the meantime.

You can go for an RESP for your children, nieces, and grandchildren as a beneficiary. But he/she must be a Canadian resident along with having a Social Insurance Number known as SIN. You can obtain this SIN number from a Service Canada Centre. You can contribute to the RESP up to 31 years. The RESP is a contract between the subscriber and the provider. Here the subscriber contributes to the RESP for one or more beneficiaries and the promoter or say organizer provides all the educational assistance payments to the registered beneficiaries at the time of requirement and for their higher educations.

The government also provides some amount of incentives to attract the RESP contribution to the
parents and relatives through which they can save some needful money for their child’s education by
contributing in an RESP.

Final Words

Anyone can open an RESP account for a child such as parents, guardians, and other relatives. While going for an RESP, you can also put your name as the beneficiary. After 31 years, which is the defined term of contribution to an RESP, you can transfer the saving from other RESPs into a single scheme. And you can use the amount until the 35th years after the initiation of the RESP plan before its expiry.
With an RESP the subscriber can earn interest on their RESP tax-free and there are various types of RESP. There are some types of RESPs, you can make monthly contributions and in some other modes, you can contribute as per your convenience. But it is always advisable to start the saving plan as soon as possible so that you can earn more interest and get a chance to see your money grow swiftly.

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