Comparing Options: Why an RESP at all?

How would you prefer to finance your child's post-secondary education?

  • Draw down your savings or investments
  • Borrow from the bank (or mortgage your home) and live in debt
  • Depend on student loans – assuming your child even qualifies
  • Find a summer job for your child that pays $25,000 or more per year

OR

Start an RESP now and have the money you need when the time comes....

We think you'll agree, there's no contest.

 

RESP contribution limits

With an RESP you can contribute any amount up to a lifetime limit of $50,000 and take advantage of a tax-sheltering strategy specially designed to maximize growth and minimize tax. Depending on the amount of time before your child begins post-secondary education, you could open a Plan for a minimum of $4.99 per month and build a significant education fund by the time your child needs it.

Benefits of a Heritage RESP

  • Tax savings: Money earned inside the plan is tax-sheltered; when the money is taken out, it is taxed in the hands of the student, who usually pays little or no income tax
  • Growth: Take advantage of government grants, including up to $7,200 from the Canada Education Savings Grant, up to $2,000 from the Canada Learning Bond and an extra $800 for residents of Alberta from the Alberta Centennial Education Savings Plan
  • Security: Your money is invested in low-risk securities earning a competitive and consistent return so your savings will be there when you need it
  • Convenience: You set up the contribution schedule that's right for you
  • Flexibility: You can adjust your contribution amount and schedule at any time*

 

CESG Interest Chart

 

QA Top
Q. How early should I start my child's RESP?
QA dots
A. As early as possible. The sooner you start, the more time your plan will have to benefit from compounding growth.
 

 

*Certain Conditions apply.

**Both examples are based on monthly contributions of $208.34 (for a total of $2,500 each year) and exclude fees. Interest is calculated with an average annual rate of 6% compounded monthly over 18 years. Canada Education Savings Grant is 20% of contributions to a maximum of $500 per child per year. Non-RESP earnings assume a marginal tax rate of 40%. Individual circumstances and results may very.