Registered Education Savings Plan in Ottawa, ON

Preparing for the Future with a Registered Education Savings Plan

21/11/2023 | Financial Planning

As 2023 comes to a close, it is important to consider financial contribution deadlines, like the one within an RESP savings account.

READ: University campus tours are in full swing. But even parents with RESPs lack an education financial plan – The Globe and Mail

An RESP savings account is a key component in preparing for a child’s post-secondary education. The accounts are designed with children’s futures in mind because:

  • The government provides a 20% grant on the first $2,500 of contributions per child per year
  • The balance in the account grows tax-free
  • Upon withdrawal, the capital is returned tax-free while grants and growth are taxed in your child’s hands at their marginal tax rate

Giving children every possible advantage for a successful career and future is imperative. Studies show that families who open an RESP are more likely to attend a post-secondary institution. For accessibility, any adult in the child’s life can open an RESP account; parent, guardian, family member, or friend.

Many Canadians find opening and managing an RESP account to be a complex task. Our CAPCORP advisors can help with the management of your RESP account, ensuring they continue to grow through recommending appropriate investment options. If you currently have an RESP account at another financial institution, it can be transferred and managed by your CAPCORP financial advisor.

The year your child turns age 17 is the last year that you can receive the government grant on contributions. December 31st represents a “soft” deadline for RESP contributions. This means if you miss a year, you can contribute $5,000 in a subsequent year and receive the 20% grant on the full amount. However, $5,000 is the maximum contribution that can receive a grant in any one year. Therefore, if you fall several years behind, you cannot make it up all in one year.

If you would like to discuss RESP accounts or other investment accounts further, please contact your CAPCORP financial advisor or email for more information.


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