A Registered Education Savings Plan (RESP) is a special savings account that can help you, your family or friends start saving now for your child’s education after high school.
RESPs are registered by the Government of Canada so savings for education can grow tax-free until the person named in the RESP enrolls in studies after high school.
For each child named, you can put up to $50,000 into an RESP. There is no annual contribution limit. Note that the Government will only add a grant on the first $2,500 saved annually.
Canada Education Savings Grant
When you open an RESP for your child, the Government of Canada will add the Canada Education Savings Grant to your savings. Since 1998, over three million children have benefited from it.
On the first $500 you save in your child’s RESP account, the Canada Education Savings Grant will give you:
- up to $200, if your net family income is $38,832 or less
- up to $150, if your net family income is between $38,832 and $77,664
- up to $100, if your net family income is more than $77,664
Canada Learning Bond
The Canada Learning Bond is money from the Government of Canada to help modest-income families start saving early for their child’s education after high school.
You can get the Canada Learning Bond for your child if:
your child was born after December 31, 2003; and
your monthly Canada Child Tax Benefit payment (commonly called “baby bonus” or “family allowance”) includes the National Child Benefit Supplement.
If your family qualifies, the Government of Canada will make a payment of $500 into your child’s RESP. Extra payments of $100 a year will be made automatically for children up to age 15, as long as you continue to receive the National Child Benefit Supplement annually. The total Canada Learning Bond available for your child could amount to $2,000. You do not have to contribute any of your own money to get this bond.An additional $25 will be paid into the RESP with the first $500 bond to help cover the cost of opening an RESP.
For more information, go to: http://www.canlearn.ca/eng/index.shtml