Registered Education Savings Plan
Save for your child's future.
A Registered Education Savings Plan is a tax-deferred investment that allows you to save for your child's post-secondary education. The person who opens the plan is known as the subscriber and may make contributions or add or remove beneficiaries. There is a limit of one beneficiary per plan except under a Family Plan, which provides for multiple beneficiaries who must be related to the subscriber by blood or adoption.
Recent changes have eliminated the annual RESP contribution limit with an increase in the lifetime limit to $50,000 per beneficiary. These contributions are not tax deductible.
Subscribers may contribute to an RESP until the end of the 21st year following the year the plan is entered into. RESP's must be used by the end of the 25th year following the year the plan is opened.
The Canada Education Savings Grant (CESG) is a grant from the Government of Canada paid directly into a beneficiary's RESP. Effective January 1, 1998, every Canadian resident under age 18 will accumulate CESG contribution room of $2,000 per year. Unused CESG contribution room can be carried forward for use in a future year. CESG is calculated as 20% on the contribution amount each year to a maximum of $400 per year ($800 if there is unused room), to a maximum lifetime amount of $7,200. The last year a beneficiary can qualify for CESG is 17. Beneficiaries aged 16 or 17 are subject to special rules. Other grants are available under RESPs.
Contact a Superior Credit Union location for more information.