There can be a million reasons that might have put you off from looking at education savings plans for your child. And unfortunately, there are a few veritable hoops to jump through, before you get the full advantages offered by the Canadian government’s registered education savings plan (RESP).
It actually took me a long time to sort through all of the information required to get this pivotal assistance for these government financing plans. But basically, you just have to choose a provider, and make regular contributions to savings in order to fund the post-secondary education of your child.
Before you choose a provider, the very first thing you need to do is get a social insurance number. You should already have one. But to open an RESP, you need to one for yourself as well as one for your child. After that, you simply need to decide on a plan provider.
A thorough list of education providers in Calgary, can be found here – Resp Calgary. But before we get ahead of ourselves, it’s important to understand what different savings options exist, as Government of Canada educational grant eligibility varies; you might qualify for more money than you think!
Three Types of RESPs:
Group plans allow you to pool money in a fund. These often get better rates of return and have similar fees to a plan that is brokered by a bank or financial institution.
If you have children that you want to name as beneficiaries’, then the family plan is right for you. Notably, a child may be adopted or it may even be a grandchild, brother, or sister.
The third option is an individual, or non-family plan. This RESP is most suitable if you are investing in someone, notably a child, who is not related to you. As implied by the name, this option is also only appropriate for one person.
If you are interested in learning more about the specific types of plans, the website of the Canada Revenue Agency has more information and details about all of the three kinds of education savings plans.
I hope you found this post helpful. Check back soon, because next time I will explore the differences between the Canada Learning Bond (CLB) and the Canadian Education Savings Grant (CESG). We will also look into some of the variation between providers of education savings plans.