It’s my annual reminder about the Registered Education Savings Plan! And this is the perfect time. With the kids in our lives back at school, it is a good time to think about their future and how we, as adults in their lives, can help support their growth and learning! 

This is general information to help you prepare to speak with your bank or an investment broker; They will tell you more detailed information. 

What is a Registered Education Savings Plan (RESP)?

• It is an account that can be at a bank or an investment company. 

• The account is “registered”, which means the government treats it in a special way. It is registered using the Social Insurance Number (SIN) of a child or youth. 
• The goal of the account is that money is saved for the child’s education after high school. The money can be used towards trade school, college, or university. 
• RESPs can remain open for 35 years so the person has time to use the money. If someone doesn’t use the money towards school, the money that was put in will be returned to the person. The portion of money the government put in will be returned to the government. 

How does the government help RESPs grow?

The government has two programs that can help the money in an RESP grow. Most people know about the matching funding, but there are two programs: the Canada Learning Bond and the Canada Education Savings Grant.

Canada Learning Bond

• The government will contribute $500 for the first year and $100 per year for each year your family qualifies. 
• The maximum amount the government will contribute through this program is $2,000 ($500 + ($100 x 15 years))
• You do not have to contribute any amount to use the Canada Learning Bond if you are eligible.
• The amount that is paid into the RESP through the Bond program is based on the family income of the primary caregiver of the child.
  • So, in order to benefit from the Bond Program, an RESP for the child needs to be opened and the primary caregiver needs to do their taxes each year. The Government will then do the rest by checking eligibility each year.

Canada Education Savings Grant

• The government matches money you put into the RESP by 20% up to $500 per year; You contribute up to $2,500, and the government will contribute $500.
• The maximum amount the government will contribute through this program is $7,500 ($500 x 15 years)
• You do not have to contribute the maximum amount of $2,500 each year to receive the 20% government contribution; They will match whatever amount you put in. 

Here is some helpful information:

• The bank or investment broker (a person who helps you decide on types of investments and manages them for you) will help you register for the RESP and the two government programs. 
• You can register once you have the child’s Social Insurance Number (SIN) and the primary caregiver has received at least one Canada Child Benefit payment for the child. 
• Consider asking family and friends to contribute to the RESP instead of buying gifts or beside small gifts, if they wish. Their money gift to the RESP will then be matched by the government, so their $20 becomes $24 with the $20% government match ($4) and then grows even more over time with interest added to it! That is a great gift.

If you have any questions, reach out to me, Caroline, at advice@unitedwaybg.com or phone/text 519-378-4773. I am not an investment expert, but I can help you look at your overall financial situation. 

https://www.canada.ca/en/services/benefits/education/education-savings.html