Registered Education Savings Plans

Helping a child obtain a good education is one of the best investments you can make for them. Today, a post-secondary education is almost essential in helping to ensure a child’s future well-being. We know how quickly ‘today’ becomes ‘tomorrow’. That’s why it’s so important to begin planning for their education early. For most students, the desire for a promising future is there, but post-secondary education funding can pose a real challenge. We can show you how to gradually work towards realizing this worthwhile goal.

Several types of plans are available to help you save money for your child’s education. Two that you might consider are Registered Education Savings Plans (RESPs) and in-trust accounts.

RESPs – The Highlights

  • There is no annual limit for contributions to RESPs. The lifetime limit per child (the beneficiary) is a maximum of $50,000. Any Canadian residents with a SIN can be a subscriber and contribute to an individual plan.
  • RESP contributions are not tax-deductible; growth earned on contributions is not taxable until it is drawn from the plan.
  • Once the child starts a post-secondary education program, education assistance payments may be drawn from the RESP to pay for tuition, books, accommodation – in fact, anything that will assist the child during their studies.
  • If your child completes their education and there’s money remaining in the plan, you may be able to name another beneficiary. Certain conditions must be met in order for any grants to remain in the plan.
  • The maximum annual amount of CESG (Canada Education Savings Grant) that can be paid in a year increased from $400 to $500 (or from $800.00 to $1000.00 if contributing for a catch-up year) but the percentage remained the same at 20%*.  The lifetime maximum for CESG remains at $7200.00
    *(Note: this means that the amount that the government matches at 20% increased from $2000.00/year to $2500.00 per/year.  They will only match for one “catch-up” year each year)

Depending on your needs, you may choose either an individual or a family RESP.

For more information contact one of our certified LCU Financial associates.


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