Education Plans: RESPs

A smart way to save for your family's future

A post-secondary education is critical in an increasingly competitive job market. Each year, fewer high school graduates are in a position to afford their continued education. With the costs of higher education increasing almost every year, early planning is essential. 

A Registered Education Savings Plan (RESP) is a government approved plan for the purpose of providing post-secondary education funding for a beneficiary. RESPs are a great way to save money now so that your child will have the money to pay for school after high school. This includes an apprentice or a program at a CEGEP, trade school, college or university.

The RESP contribution deadline is December 31 each year.

What are the benefits of an RESP?

RESPs combine flexibility, tax deferral and direct government assistance to help fund the education of your children, grandchildren, or another special child in your life

  • Tax Deferred Earnings
    RESPs offer tax deferral. This means that interest income and investment growth earned within an RESP are not taxed as long as the funds remain in the plan. Withdrawals from an RESP are taxed in the hands of the student, which usually means they pay little or no tax.
  • The Canada Education Savings Grant (CESG)
    With the CESG, for an eligible beneficiary under the age of 18, the government matches 20% on the first $2,500 contributed annually to an RESP. The maximum total CESG the government will give, up to age 18, is $7,200 per beneficiary. This money is invested along with your contributions, leading to greater compound  investment growth within your plan.
  • Canada Learning Bond (CLB)
    A $500 CLB is provided for children of families who are entitled to the National Child Benefit as long as they continue to receive the National Child Benefit Supplement. The total maximum CLB payable per child is $2,000.

Is there a contribution limit?

There is no annual contribution limit; however, the lifetime contribution limit per beneficiary is $50,000.

Why choose a YNCU RESP?

A YNCU investment professional can:

  • Provide professional advice and service
  • Estimate how much your family will need to start saving for post-secondary education
  • Help you set your education savings goals
  • Develop a savings and investment plan to help you reach your education savings goals.

Resources

Estimate the cost of education

You can estimate the cost of your post-secondary education by using the Education Cost Calculater at GetSmarterAboutMoney.ca. Taking your choice of program and all other expected costs into consideration, this tool allows you to compare up to three different options.

getsmarteraboutmoney.ca/tools-and-calculators/RESP-savings-calculator/RESP-savings-calculator

 

Brochures and pamphlets to download

  • Member Education Savings pamphlet
  • Canada Learning Bond pamphlet
  • RESP: Plan your child's education savings pamplet

Links

 

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