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WHAT IS AN RESP?
An RESP is a special
savings account to help you, your family or your friends save for your
child’s education after high school.
The money in the RESP will
be invested so that it can grow and earn interest.
You will not be taxed on
the interest, and your child can usually withdraw the money tax free.
What Does it cost to open an RESP?
At Rice Financial there is
no charge.
Ask for advice to find an
RESP that suits your needs.
How much money do I have to put in the RESP?
No matter how little you save
in your child’s RESP the Government of Canada will still pay the Canada
Education savings Grant.
You, your family, or
friends can put money into your childs RESP whenever you want, and can
save as much or as little as you want.
Even $5.00 a week can add
up quickly, especially when the Canada Education Savings grant is added
to your savings.
The sooner you start to
save the better.
How Much Canada
Savings Grant Money Can I Get?
If your net family income
is below $35,595 the Canada
grant will give you 40 cents for every dollar on the first $500 you save
in your child’s RESP.
If your net family income
is below $71,190 the Canada
grant will give you 30 cents for every dollar on the first $500 you save
in your child’s RESP.
If your family net income
is over $71,190 the Canada Grant will give you 20 cents for the first
$500 you save in your child’s RESP.
No matter what your net
family income is, if you save over $500, the Canada Education grant will
give you 20 cents for every extra dollar, up to $2000.
What if I can’t afford tto save for my child’s education right
now?
Even a small amount of
money can make a difference when the Canada Education Savings Grant is
added. Plus, that money will earn interest over time.
You may also be eligible
for a $500 Canada
learning Bond:
If your child was born
after December 32.2003 and;
If you get the National
Child Benefit Supplement as part of the Canada tax Benefit. This
usually applies to families whose net family income is less than $35,595.
You can also get an extra
$100 per year for up to 15 years, as long as you continue to receive the
National Child Benefit Supplement.
You don’t have to
contribute any of your own money to get the Canada Learning Bond. All you
need to do is open an RESP and the Government of Canada will deposit the
money into your child’s account.
What Happens If My Child Doesn’t Continue Education After High
School?
The RESP can stay open for
up to 26 years, so if your child does not continue education immediately after
high school, the money can be used if he or she decodes to go to school
later.
If the money is not used
26 years after the RESP is opened, the amount you saved goes back to you,
and the Canada Education Savings Grant may be used for another child’s education.
The Canada Learning Bond is returned to the Government of Canada.
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