Registered Education Savings Plans (RESPs) are one of the best ways to help you, your children, or your grandchildren make the dream of college or university a possibility. RESP's are:
Flexible: Anyone can open and contribute to an RESP, and there are options available should your beneficiary choose not to pursue post-secondary education. Funds can be used to cover an array of post-secondary expenses; including tuition fees, textbooks, and room and board. A minimum contribution of only $25 per month is required.
Tax-sheltered: You do not need to pay tax on any investment income associated with RESPs. Withdrawals are taxed to the student beneficiary at his or her marginal tax rate which is typically in the lowest tax bracket.
- Contributions are not tax deductible
- You can contribute up to $50,000 per child (beneficiary)
- Funds are withdrawn in the beneficiary's name and become part of their taxable income for that year.