The best time to start saving for your child’s education is now. Open a Registered Education Savings Plan (RESP) and watch your savings grow right along with your child. Give them a winning advantage for their future.

An RESP is a tax-deferred investment that allows you to save for your child’s post-secondary education, and the government will pay a grant to your RESP based on the contributions made by you. For each $2,000 contributed annually (either by lump sum or regular monthly investments), a grant of 20% is paid to a maximum of $400 per year. That could work out to $42,000 in RESP contributions over the years, PLUS the maximum lifetime grant of $7,200 for each student.

While the contributions are not tax-deductible, taxes on all income and growth in the plan are deferred until the child takes money from the plan for their post-secondary education. Since most students have a low income, little or no tax would be payable.
If the child beneficiary chooses not to continue their education, the funds can be used for another qualified beneficiary. You can also withdraw your contributions tax-free, and if certain conditions are met, transfer up to $50,000 of the RESP income into an RRSP, provided you or your joint subscriber have contribution room available. However, if you simply withdraw the accumulated funds, the income earned in the RESP is subject to income tax at the subscriber’s marginal tax rate. Also, an additional 20% tax is charged and the government grant will have to be paid back.

Talk to your Mobile Money Manager or Pavilion staff about opening an RESP today. They can educate you on everything you need to know, because investing in your child’s future is an investment for us all.