What is a Registered Education Savings Plan (Such as Global RESP)?
It’s basically a registered investment savings account (ie. Global RESP). It allows you to store away money that can eventually be used towards funding future post-secondary Educational costs. Just like you ca do with Global RESP. And the best part is, you can also receive grants from the government. As well as tax-deferred growth and earnings along the way, until used by the beneficiary for education.
Typically, an RESP account is opened by parents who would like to save money for their child’s (or children’s) education. Which is definitely a wise decision! That being said, anyone can open an RESP, and store away money for a future education.
The bonus is, that over the years, they can watch their RESP investment grow. While also taking advantage of the wonderful grants available by the Canadian government… Which offers up to $9,200 in Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB) to eligible beneficiaries. Companies such as Global RESP can help you receive all of these grants by setting you up with an RESP account.
To understand the breakdown in more detail – the CESG adds up to 20% for a maximum of $500 to your annual RESP contribution per child, to a lifetime maximum of $7,200, or until December 31st of the year the child reached 17 years of age. Whichever comes first.
When it comes to the CLB (Canada Learning Bond) however, Children born on or after January 1, 2004 can be eligible for the CLB, up to a maximum of $2,000.
When you add all of those up, you can receive up $9,200 worth of grants!
What TYPE of Global RESP is the Best for You?
In a nutshell, there are 3 main types of RESP plans available:
- Individual RESP Plan
- Group RESP Plan
- Family RESP Plan
With rising costs of tuition fees, attending any post-secondary education program can get expensive. The stress of paying off academic debt, fees for books and taking care of living arrangements can take a toll on students. It is difficult to set your children up for success when they are constantly burdened and reminded of these financial pressures. Any parent that wants the best for their children should begin saving for their future as soon as possible. With all the investment fads out there, it can be challenging trying to find the right resource..
Often, one of the most rewarding ways to invest your hard earned money comes from RESP Plans. Firstly, there’s the Individual RESP Plan. Individual plans can only have one named beneficiary. The beneficiary can be any individual appointed by the subscriber, including themselves. There are no age restrictions on this type of account, however CESG (Canada Education Savings Grant) and other grants can only be paid to beneficiaries under the age of 18. The beneficiary on the account can be replaced by anyone else. But if the new beneficiary is not blood related to the subscriber then any CESG (grants) have to be repaid. One of the best, and most flexible individual RESP plans can be found at Global RESP – Registered Education Savings Plan.
Alternatively, you can choose to go with the Group RESP Plan that is designed for you to invest money along with multiple plan members. Once the plan has been opened, the plan dealer is responsible for managing all the plan members’ contributions and investment choices. The payment options are more structured and there is a required deposit that must be made upon opening the plan.
Lastly, a Family RESP Plan is ideal if you have more than one child. According to the Canadian Government, “The advantage of a family plan is that earnings can be shared among the children. And the Canada Education Savings Grant may be used by any beneficiary named in the RESP, to a maximum of $7,200. The Additional Canada Education Savings Grant and the Canada Learning Bond can be paid only if all the beneficiaries in the plan are siblings.”
As you browse this site, you’ll be able to educate yourself and access information on these two popular types of RESP plans. We know it can be challenging trying to pick the investment option that’s right for you. But your future self will thank you after making an informed decision.
And you could than us later! 🙂
Choosing An RESP Provider
We know that choosing an RESP provider, such as Global RESP is a big step in the right direction to provide your child with an education and bright future. In order to ease you into this commitment, review these 8 questions to help you determine the provider that’s right for you:
RESP Provider Evaluation Checklist:
- What fees am I expected to pay? When do I have to pay them?
- Do I have to make regular contributions? If so, what happens if I miss a contribution?
- What investment options are available?
- When and how will payments be made from the plan?
- What kinds of post-secondary programs qualify?
- Are the plan’s rules more restrictive than the government’s rules on which programs qualify? Find out which programs may qualify.
- What happens if my beneficiary doesn’t continue with their education after high school?
- What happens if I want to cancel the plan? Is it easy to get my money out? Will I have to forfeit my earnings?