RESP And Your Child's Education

Paul Diamond 2016-10-24 13:00:00

The benefits of RESP cannot be underestimated. This investment plan will enable parents to save funds for their child's post-secondary education well in advance. Most students are left smothered by debt while entering a post-secondary institution. It becomes necessary to manage finances and ensure things don't get to that point.

This is why the RESP is set up to help Canadian parents.

Let's take a look at how the RESP can assist and the advantages provided to parents who go down this route.


How It Works

RESP is a set plan that has a core interest rate paid on the amount being deposited. Parents are expected to put in a set amount on an annual basis to keep the plan intact. This amount will be around the $2500 figure. Once this amount is reached, the benefits of an RESP plan will begin to reveal themselves. Ask online to CST Consultants about the whole benefits.

These benefits are going to include:

1) Tax Savings
2) 20% Match From Canadian Government (First $2500)
3) General Interest Rate On Deposits

All of this combined will lead to a positive account and a way for your child to pursue an education in a post-secondary setup as desired.

Canadian Government's Role

The 20% rule is established to incentivize hitting the set amount on a yearly basis. For parents who are unable to reach the $2500 mark before the year's end, there is a way out. The parents can add in the funds later on making sure the previous year's total is matched.

For example, if a parent puts in $5000, they'll get two year's worth of increase (i.e., %20 + 20%).

This is done to make sure parents are looking at keeping the plan going and helping their child receive the funds they require moving forward. It's important to remain on top of this to maximize those contributions on the part of Canada's federal government.

RESP is all about making sure your child receive a high-quality education when they graduate from high school. It's important to make sure the plan is well understood, and its perks are tapped into because the value is there for one and all.

Instead of dealing with crippling debt, the parents will know their child is safe and won't have financial concerns heading into their post-secondary program. Consider all options when it comes to this plan as there are a lot of added benefits of doing so.