After a long summer, September, the start of back-to-school season, is a time for fresh starts and getting back into the routine. Even if they are not yet old enough to attend school, opening a Registered Education Savings Plan is a great way to start planning for your child’s future education. Approach Rajdeep Dhaliwal®, the best RESP providers in Calgary, for investing in RESP.
In order to encourage Canadians to save money aside for their children’s education, the Canadian government launched RESPs in 1974. In essence, an RESP is a sort of investment account that enables you to generate investment returns that are tax-sheltered. The Canadian Education Savings Grants, or CESGs, were further established by the government in 1998 and promised to match 20% (up to $500 annually) of your RESP contributions.
But, a lot of people are still unsure of whether or not to invest in RESPs. Well, by the time you end reading this blog, your dilemmas will come to an end.
So, here are four more solid reasons for starting an RESP right away:
- RESPS SERVE AS FINANCIAL ASSETS
RESPs are tax-sheltered investment accounts. RESPs are also frequently referred to as “tax-advantaged,” which means that the CRA will provide Canadians a tax benefit in exchange for their saving for their children’s post-secondary education. You don’t have to pay tax on capital gains and interest income, similar to a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA), so long as your investments aren’t withdrawn before retirement.
- RESPS FETCH YOU REAL MONEY
The government will match 20 cents of every dollar you put into your child’s RESP up to a maximum of $500 annually ($7,200 throughout the course of your plan). Isn’t it pretty amazing? Without even taking into consideration the growth of your money, that amounts to a guaranteed 20% return on your investment.
Lower-income families may be eligible for the Canada Learning Bond in addition to the federal government payments mentioned above.
- WITH RESPS, YOU MAY INVEST YOUR MONEY
The advantage of investing in an RESP is that you can invest the money however you like. Investing in an RESP can be done with mutual funds, ETFs, GICs, stocks, or bonds.
- YOU ARE SAVING FOR RETIREMENT EVEN THOUGH YOU ARE UNSURE IF YOUR CHILD WILL UTILIZE THE MONEY
Not sure that post-secondary education? You don’t have to worry if your child doesn’t use the money for school. An RESP can still be open for 36 years if the money isn’t used for school. Therefore, if the money hasn’t been used for post-secondary education, you can transfer it to another child or to your RRSP without penalty.
Hence, contact Rajdeep Dhaliwal® the best RESP providers in Calgary in order to obtain the right advice in terms of RESP investment.