Benefits of Extra Contributions | Registered Education Savings Plan (RESP)

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RESP’s (Registered Education Savings Plan) are an important part to saving for your child’s educational future. The week I came home from the hospital with my son, I made an appointment to set up his RESP account.

The cost of post secondary is only increasing, and I don’t want to subject my son to a bunch of student loans when his time comes. Tuition and books (on top of living expenses) are costly as it is, I can’t imagine what it will be like in sixteen more years.

I do have a certain amount transferred to my son’s RESP account every month, but I am always looking for ways to increase his balance. Each RESP account has a maximum contribution limit of $50,000 and I want to do my best to reach it.

One way to increase your RESP contribution is to use your tax refund!

I consider my annual tax refund from the Government, a “bonus” cheque. In the past I used to blow that money on things I really didn’t need (clothes, fancy dinners out, and that really expensive purse) and now that I’m a mother, I want to invest it into my child’s future.

Every dollar makes a difference.

The Benefits of Extra Contributions Towards Your Registered Education Savings Plan (RESP)

There are the benefits of The Canada Education Savings Grant, Canada Learning Bond and the provincial savings in British Columbia, Alberta, Saskatchewan and Quebec.

With The Canada Education Savings Grant The Canadian Government will top up your RESP contributions by 20% (up to $500 per year) with a lifetime maximum of $7,200 per eligible child. Qualifying families could also receive up to 40% on the first $500.

The Canada Learning Bond is something that you have to qualify for. There will be subsequent instalments of $100 for each child until they are 15 years old. The Primary Caregiver’s income must be eligible to receive the National Child Benefit Supplement, which is included in the Canada Child Tax Benefit, and is generally paid to families with a low to moderate income.

Confused? Don’t be a Heritage Education Fun representative can explain it all for you and help you get your child’s RESP account open.

It’s never too late to start saving.

Tax Benefits

There are tax benefits with RESPS. When your child does go to post secondary or a trade school (what qualifies at the time), the gains are taxable in the student’s name.  However, students typically have high exemption status, low income, and any taxes they will pay should be lower.

If in the end your child does not use the RESPs, you are able to transfer them to your RRSP`s, nothing goes to waste. Your money is your money.

To find out more about your provincial benefits of contributing to an RESP, contact Heritage Education Funds.

Heritage Education Funds

Start Early. Save Often. Stay Invested.

Win With Heritage Education Funds

Win $20,000 in contributions towards RESPs to be given away! It’s back once again! Our Annual RESP Draw offers you a chance to win 1 of 8 contributions of $2,500 towards a Heritage Education Funds RESP plan. Draw date is December 31, 2014. You can enter here.

 

Comments

  1. RESPs are so important. Investing in our children’s futures is something parents think about, but I was surprised to discover that a few of our friends don’t actually pay much mind to RESPs. This was shocking to me.

    Thanks for the great post on Heritage Education Funds!
    Christine recently posted…#BConnectedConf & Being Our Authentic, Genuine SelvesMy Profile

  2. I am ashamed to admit that, as a banker myself my kids do not have RESPs. :-( I know, shame on me :-( We do have savings for them and bonds, but I really need to put them into RESPs as soon as possible. Thanks for the reminder!!
    Suzanne Rudge (MapleMouseMama) recently posted…Two Down, Two To Go: Egg Allergy Beaten!!My Profile

  3. We have RRSP’s but have yet to set our kids up with RESP’s. Which has been on our to-do list for sometime. Although we understand the importance to it. We need to firm up on this and get this started!
    Tammy @inRdream recently posted…Eating Out with Small Kids: Restaurant GamesMy Profile

  4. We have RESPs for the kids too and set them up immediately after they were born. Husband takes care of them. We also have savings accounts we contribute to every month. I cannot imagine how much post secondary education will cost by the time they get there but at least they will have more savings than I did when I went to university.
    Brandy recently posted…Feel Better With Bowen TherapyMy Profile

  5. this is something we need to get on top of, thanks for the reminder!
    Jennifer (@momvstheboys) recently posted…The Healthy Shopper 2014 Spring Picks {Giveaway}My Profile

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