RESP, which stands for Registered Education Savings Plan, is a savings programme created to assist parents and legal guardians in setting aside money for their kids’ education. These are a few advantages of RESPs:
Government Grants: The Canada Education Savings Grant, which the government offers as a matching grant for contributions made to the plan, is one of the major benefits of RESPs (CESG). Depending on the amount donated to the plan, the CESG may offer up to $500 yearly.
Tax-Deferred Growth: RESPs also have the benefit of tax-deferred investment growth. This means that up until the time you remove the money from your RESP, you won’t have to pay taxes on it.
Flexibility: RESP offers flexibility in terms of the amount and timing of contributions. There are no time limitations on when you may make donations, and the maximum contribution per child is $50,000.
Many Beneficiaries: The RESP permits you to choose several beneficiaries, allowing you to use the plan to fund the education of more than one kid.
Access to Funds: Finally, RESP enables quick access to monies once your child is ready to start school. Your child can withdraw the funds tax-free to cover their tuition, books, and other costs once they begin post-secondary study.
RESP is a great option for parents and guardians to take advantage of tax benefits while saving for their children’s education overall.