Registered Education Savings Plan (RESP)
Since our childhood, we have heard the word Insurance tossed around in medical offices or hearing other people discuss vehicles. By the time we turn into the adult we come to know that insurance means protection and safety. It is right that insurance is a measure of safety and provides us a form of protection from something that goes wrong or something is most necessary in our life. Whether it is a damaged vehicle, broken leg, flooded house or costly education, it is necessary to have a cover in the form of insurance or else unnecessary cost can boost rapidly.
In today’s knowledge-based world, getting a post-secondary/higher education has become more important than ever for you if you are a student or for your children/grandchildren if you are parents. But for many students, it is difficult to meet their increasing tuition cost and other educational related expenses without their family support. To cope with this, it is necessary for parents to give their children a guaranteed future despite their financial condition. In order to support the students for their education and to help families save for their children’s post-secondary education, the government of Canada introduced the Registered Education Saving Plan (RESP) back in 1972. Since then RESP has grown considerably and has become the main vehicle for saving for education with great advantages in paying taxes.
What is RESP:
Registered Education Saving Plan (RESP) is an account, a vehicle available to the Canadian parents/grandparents to save for the post-secondary education of their children whether it is an apprenticeship, trade school, or university. There are countless ways to invest in RESP funds and if utilized on higher education of a child or education-related expense, the money grows in the account will be tax-free.
There are many Advantages of RESP:
Money Grows Tax-Free Until Withdrawn:
A unique advantage of this fund is that the government of Canada gives you free funds for your child higher education by contributing 20% up to a maximum of CAD $7200 in this fund for each child. The money is subject to tax only when it is withdrawn to pay out to the beneficiary, in most cases your child, to pay his educational related expenses which can include tuition, housing, books, or living expense.
Investing Your Money:
Your funds in RESP account can be invested in countless ways in any manner of instruments i.e. mutual funds, ETFs, GICs, stocks, bonds. Some RESP plans allow you to decide how to invest your money. Others invest money for you.
Friends and Family can Contribute:
It doesn’t matter who opens the account. It could be parents, grandparent, uncles, aunts, and even friends can open RESP and contribute to it as long as he’s got access to a child’s Social Insurance Number.
Choosing RESP Provider:
RESP account can be open at a bank, a mutual fund company, an investment dealer or a group plan dealer, and certified financial planners in Ontario. Before you decide to open the RESP account for your children, it is very important to choose the right type of RESP plan in Ontario. Your RESP provider in Ontario will help you choose the best RESP plan in Ontario that best suits your need as there are following different types of RESP plans:
- Individual Plan
- Family Plan
- Group Plan
With several many options to choose from, make sure to take the time and carefully choose the best RESP provider in Ontario who will help you choose a right RESP plan in Ontario as per your requirement, advise you on making investment and administer it.
FirstChoice Global Financial is the best choice to get RESP plan in Ontario for your children for his higher/post-secondary education to secure their future.