A Registered Education Savings Plans With Talka Credit Union
A Registered Education Savings Plan (RESP) is a special savings account for parents or primary caregivers who want to save for their child’s education after high school.
Similar to a Registered Retirement Savings Plan any gains within the plan are not taxable until withdrawn, however contributions cannot be deducted on income tax returns.
The Government of Canada also provides additional incentives such as the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB).
The Canada Education Savings Grant offers up to $600 per year assuming an annual contribution of $2,500 is made into the plan. The lifetime maximum for the Canada Education Savings Grant is $7,200.
The Canada Learning Bond is based on income and if eligible the beneficiary will receive $500 they qualify with subsequent deposits of $100 annually up to a maximum of $2,000.
The maximum lifetime contribution limit for a Registered Education Savings Plan is $50,000 and the plan has to be wound down if still in existence in its 35th year.
In order to open a RESP the parent or primary caregiver must present the Social Insurance Number (SIN) of the child that they are naming as a beneficiary of the plan.