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RESP – Registered education saving plan

When your child’s secondary education costs are beyond your reach, RESP will be of great help to you. A Registered Education Savings Plan or RESP combines flexibility, tax-deferred savings growth and direct government assistance to reach your education savings goal for your children.

What is Registered Education Savings Plan or RESP?

Registered Education Savings plan (RESP) is a unique tax-sheltered savings plan that assists you to save for a child’s post-secondary education. RESP withdrawals are taxed in the hands of the student, where he/she may have to pay a little or no tax.

Opening a Registered Education Savings plan (RESP)

You can set up a Registered Education Savings plan (RESP) for any “beneficiary”.  Every beneficiary must be a Canadian citizen and have a social insurance number (SIN) that can be obtained from a Service Canada Centre.

How can you contribute to a Registered Education Savings Plan or RESP?

You can contribute any amount to RESP subjected to a limit of $50,000 per beneficiary. You won’t be able to take away the contributed amount made to a RESP from the taxable income. The investment earnings on RESP contributions are tax-deferred.

Beneficiary will be taxed on the withdrawal of the Registered Education Savings Plan or RESP earnings, they are not taxable to the subscriber. One can contribute to a Registered Education Savings Plan or RESP till 31 years and the plan will be valid for 35 years.

Types of Registered Education Savings Plan or RESP

A Registered Education Savings Plan or RESP can be set up as a family plan with multiple beneficiaries. Under a family plan, the beneficiaries must be related to you by blood or adoption, it may be your children and grandchildren.

What is Educational Assistance Payments (EAPs)?

If the student is enrolled in a post-secondary education program; bonds, grants and the accumulated income within the RESP can be paid to the student at subscriber’s responsibility. These payments are Educational Assistance Payments (EAPs).

If the beneficiary of the Registered Education Savings plan (RESP) decides not to pursue post-secondary education. You will have the following options:

  • If you are having a family plan, you can assign another beneficiary to accept the government grants.
  • If you are having an individual plan, you might have an option to name an alternate beneficiary.
  • If the plan is 10 years old and the beneficiary has reached 21, the subscriber can withdraw the earnings. The withdrawn amount will be considered as taxable income.

Benefits of Registered Education Savings Plan or RESP

Registered Education Savings Plan or RESPs offer tax deferral.

This means that investment growth and interest income earned within an RESP are not taxed as long as the funds remain in the plan.

Company Information

Zen+ Financial

10 Milner Business Crt, Suite 208
Scarborough, Ontario, M1B 3C6


Jelan Arumuganathan
Insurance & Financial Adviser

416 220 1010

E-mail address:
info@zenplus.ca