Education makes a person strong skilled and capable of making money in every kind of situation. Good education makes way for a good future. That's the reason why every parent wants to see their children pursue college education in their interested field of study.
The cost of higher education in Canada is beyond affordable. Parents with low-income get panic when they see the huge amount required to get the education for their children. With some preparation, parents can easily make it through the expenditure. They need to save and be prepared.
The government of Canada offers many financial aids programs that help the parents to meet the costs of their children's higher education. But the plan that helps the parents save good amount of money for the future of their children is the Registered Education Savings Plan. This plan is approved by the government. The returns on the money invested in this plan are transferred to the savings account and all that income is exempted from the Income tax under the Income Tax Act.
When you decide to invest with a RESP, you need to go with a service provider who is very well experienced and has good reputation. There are many service providers who sell the RESP plans but all need to be more stable. The Heritage Education Funds Inc. is the most experienced service provider in the market. They are selling RESPs since 1965 and so far they have helped 400,000 families to save for the higher education of their children. They have $2 billion of assets which make them the most stable service provider.
The RESP plans offered by the Heritage are very flexible. The money invested by all the subscribers is pooled and invested in an opportunity with minimum risk and high returns. The beneficiaries associated with this plan benefit from the financial aid from other plans offered by the government. As a citizen or a legal resident of Canada it is very easy to create a Heritage RESP. You need few documents and the Social Insurance number of your children. You can invest as much as you can monthly or yearly. Investing a big amount once every five or ten years is also an option. On the maturity of the plan, the beneficiary gets enough funds to pursue the higher education in their desired field of study.
A Registered Education Savings Plan (RESP) is a great way to save for your child's post-secondary education. Here's how an RESP can help you:
Government grants:
The government of Canada offers various grants to families who save for their child's education through an RESP. The Canada Education Savings Grant (CESG) provides a 20% match on contributions up to $2,500 per year, with a lifetime maximum of $7,200 per child. The Canada Learning Bond (CLB) provides up to $2,000 in government contributions for low-income families.
Tax-deferred growth:
Any investment growth within an RESP is tax-deferred, which means that you don't pay taxes on the earnings until the funds are withdrawn. This can help your savings grow more quickly.
Flexibility:
RESP funds can be used for a variety of post-secondary education expenses, including tuition, textbooks, and living expenses. Additionally, if your child decides not to pursue post-secondary education, you can transfer the funds to another child's RESP or withdraw them (with tax consequences).
Plan for the future:
By starting an RESP early, you can plan for your child's education and ensure that you have the funds necessary to cover the costs. You can set up automatic contributions to make saving easier and more consistent.
Encourage education:
By saving for your child's education, you're demonstrating the importance of education and encouraging your child to pursue their academic goals.
Overall, an RESP is a great way to save for your child's education and take advantage of government grants and tax-deferred growth. Speak to a financial advisor or investment professional to learn more about setting up an RESP and maximizing your savings potential.
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