There are a lot of financial organizations registered to provide a Registered Education Savings Plan (RESP). But, just like the RESP itself, each provider is unique. And who you decide to go with can radically alter how much money the RESP generates over the lifetime of the plan.
An RESP is a tax-deferred savings plan that can help you save for a child’s post-secondary education. With an RESP, you can make annual contributions of up to $2,500 per year, for a lifetime maximum of $50,000.
The biggest benefit of the RESP is the ability to have all of the earnings, or capital gains, on the investment inside the RESP grow tax-free until it is withdrawn by the beneficiary when they go on after graduating from high school. When the RESP is paid out, the money is included in the student’s income. But because they are in the low- to zero-tax bracket, they will pay little, if any, taxes.
Another great benefit of the RESP is the Canada Education Savings Grant (CESG), where the Canadian government matches 20% of the annual RESP contributions, up to a maximum of $500.00. The lifetime maximum for a CESG is $7,200 per child.
The Right Provider Can Help Your RESP Grow Substantially
Between the RESP and CESG, you could set aside $57,200 for your child’s post-secondary education. But it’s important for that money to grow. Choosing the right RESP provider and contributing right away to the plan could help you reap significant, long-term financial rewards.
It’s important for that RESP money to grow. That’s because the cost of a post-secondary education in the Greater Toronto Area (GTA) is going up much faster than the rate of inflation. In fact, Ontario is the province with the highest annual undergraduate tuition rates at $7,868.1 That’s just for tuition and doesn’t include books, student fees, housing, etc.
With so many RESP options to choose from, it’s imperative that you take the time to carefully choose an RESP provider that meets your financial and lifestyle needs. The RESP provider will help you choose the right RESP, advise you on different investments, administer the RESP and apply for free government grants, and help provide the money when the recipient is ready for their post-secondary education.
9 Questions to Ask an RESP Provider
The company that sets up and administers the RESP is called the plan provider; it can be a bank, trust company, or independent, registered provider. Each provider sets up its RESP differently and will have different rules. Before you decide on an RESP provider it’s important to ask them some questions and find out which provider is best for you.
1.Once I have opened an RESP, do I have to pay any fees? If so, what are they for, how much will I have to pay, and when do I have to pay them?
2.Do I have to put a minimum amount of money into an RESP?
3.Do I have to make regular payments? What happens if I miss a payment?
4.What investment choices are available? What are the benefits/risks?
5.Are there any penalties or fees for withdrawing RESP money early?
6.Can I transfer the RESP to another person? If so, is there a fee to do a transfer?
7.What happens if I close my RESP early? Do I forfeit any earnings?
8.Does the RESP provider offer all education savings incentives, including the Additional Canada Education Savings Grant, Canada Learning Bond, and provincial grants?
9.Will you provide me with regular documentation on the status of my RESP and investments?
Why Choose Global RESP Corporation for an RESP in the GTA?
There is a lot to consider when it comes to opening an RESP. Next to actually opening an RESP, the most important step is choosing the right RESP provider. But you can’t open an RESP and start saving money for your child’s post-secondary education until you find the right RESP provider.
Global RESP Corporation (GRESP) is a leading provider of RESPs in Canada with offices in British Columbia, Alberta, Ontario, and Quebec, and hundreds of independent representatives across the country.
Why choose GRESP over a financial institution? It’s simple. GRESP’s Dealing Representatives specialize exclusively in RESPs. GRESP is one of the few companies that administer all provincial and federal grants available.
In addition to providing flexibility and a wide range of investment opportunities, GRESP also has the lowest administrative fees in the market and no minimum plan contributions.
To learn more about opening an RESP, talk to a Global RESP Corporation dealing representative in your area, or you can fill out a form and a Global RESP Corporation dealing representative will contact you at your earliest convenience.