Why It Is Beneficial To Have Registered Education Savings Plans in Canada

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Why It Is Beneficial To Have Registered Education
Savings Plans in Canada
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Here we discuss some good to know aspects of
these plans and how they can be beneficial for
you to save for your childrens future.
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What is RESP
The government of Canada formulated Registered
Education Savings Plans allowing you to save for
higher education for your children. It is
possible for you to use these savings to cover
the costs of the education of a child after high
school. This plan allows you to have a tax
advantage and helps you to save periodically and
help your child to achieve their educational
dreams without taking the risk of having
high-interest student loans.
Types of RESP
There are three types of Registered Education
Savings Plans in Canada. You can opt to have
individual, family or group RESP. Each type has a
different structure. So, it is wise to be with a
reputed insurance expert to have the proper
advice on these plans.
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The benefits of enrolling in Registered Education
Savings Plans in Canada
There are quite a few benefits of enrolling in
RESP. Let us have a look at those.
Tax benefit
RESP is a tax-benefited account. The growth of
the money is free from any tax liability. Not
only that but the withdrawal is also free from
any tax. However, the investment gains are not
free from tax. The responsibility to pay is on
the shoulder of the child. Knowing that the child
will not have a stable and high income at that
stage the government has kept the tax rates low.
The extra benefit from the government
Irrespective of the nature of your investment,
the Canadian government pays you extra money
through Canada Education Savings Grant. There is
nothing to lose in opting to enroll in this plan.
The additional grant from the government can be
beneficial for the college education of your
child.
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Reduction of the overall burden
The cost of a college education is high in
Canada. As you save systematically for years you
can save a considerable amount. The saved amount
reduces your stress and you can afford to bear
the cost of your childs education.
Variety of saving options
Depending on your investment objectives, risk
tolerance, and time horizon, you can select from
various saving options like stocks, bonds, mutual
funds and GICs.
Anyone can contribute
Your friends and family members can contribute to
the RESP of your child. As this is possible the
amount of savings can grow quickly. These
benefits of Registered Education Savings Plans in
Canada definitely entice you to have one for your
child. If you desire such, it is wise to contact
Gurinder Chahal Insurance Specialist. You can
expect to have the best advice to choose the
perfect RESP for your child. Call him at 587 707
7000 to request a callback.
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Thanks!
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