RESP (REGISTERED EDUCATION SAVINGS PLAN)

Help your children realize their career dreams

Registred education savings plan

Putting money aside for your children or grandchildren to attend a college or university is one of the best gifts you can give them. Of course, you already have numerous financial obligations.  So, how can you contribute to their future success without making sacrifices or having second thoughts about the merits of higher education?

The RESP allows you to easily accumulate capital for the post-secondary education of your children or grandchildren. By investing in an RESP, you benefit from advantageous government grants and your savings grow tax-free. Determine the amount and type of investment that you want and start growing your money now, tax-free.

The RESP gives you a tax advantage and allows you to receive an attractive grant; the RESP really is profitable!

If you invest $2000 per year from your child's birth onward, in 18 years, that amount will total $36,000.

Of course, this amount will grow more in a (tax-free) RESP than in a (taxable) non-registered account.

And that's not all. Because of grants, RESPs will yield much higher returns than TFSAs.

Here's what you'll get at the end of the period:

Registred education savings plan

Calculation assumption:

  • 4% annually compounded rate of return based on a balanced portfolio;
  • Tax rate: 29.65%;
  • Canada Education Savings Grant of 20% in the RESP.

Who can open an RESP?

A parent, grandparent or friend can open an RESP. They then become the RESP subscriber and the designated child, the beneficiary. The child must have a social insurance number and be a Canadian resident. It is possible to have several subscribers for the same beneficiary child.

Grant

The RESP is one of the best ways to invest in your child's future. Government grants, which add to your contribution, are equivalent to an impressive return of at least 20%. The Canada Education Savings Grant (CESG): up to $500 per year, for a maximum of $7,200. For example, here are the grants you would get with a contribution of $2,500 per year.

 

Canada Education Savings Grant (CESG)
Net family income Basic CESG Additional CESG Yearly maximum
$45,282 and less 20% 20% $600
From $45,283 to $90,562 20% 10% $550
$90,563 or more 20% $500

 

Is your income limited? The Canada Learning Bond (CLB) provides an opportunity to save for the education of a child under the age of 15 from a low-income family. Eligible families receive an initial amount of $500 in the first year of opening an RESP. For the following years, $100 per year is paid to you, up to a maximum of $2,000, for each year the family remains eligible.

Investment options

Depending on your investor profile, several investment options are available, including:

  • Guaranteed fixed-rate investments (GICs)
  • Mutual Funds1

Make an appointment. We can guide you in choosing an investment for your RESP and give you information on the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB).

For more details, see the RESP brochure.

1. Mutual funds are sold and distributed by Acadia Financial Services Inc. Acadia Financial Services Inc. is a wholly-owned subsidiary of Financière Acadie Inc. which is itself a wholly-owned subsidiary of the Caisse populaire acadienne ltée. Commissions, trailing commissions, management fees and other expenses may be associated with mutual fund investments. Please read the prospectus or the Fund Facts before investing. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. Unless otherwise stated, mutual fund securities and cash balances are not insured by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in credit unions.