For many families, September means a return school. It is also a good time to discuss the powerful advantages of the Registered Education Savings Plan (RESP). For most households, the RESP is the top vehicle available for children’s education savings.

Here are the key facts:

• Annual maximum contribution: $2,500 (or $5,000 if you have carry-forward room) per child
• Matching annual grant: 20%, or $500, if you make a $2,500 contribution
• Maximum lifetime grant: $7,200 per child (would require $36,000 in contributions)
• Maximum lifetime contributions: $50,000 per child
• BC Training and Education Savings Grant: One-time $1,200 government grant (no contribution required) for BC children between ages 6-9
• Tax-Sheltered Growth
• Same investment options as an RRSP or TFSA
• Account can stay open for 35 years from the date it was opened
• Funds can be accessed when child attends post-secondary. If child never attends post-secondary, the grant will have to be repaid. The growth can be rolled over to RRSP (room permitting). The contributions can be fully refunded
• Definition of post-secondary enrolment is flexible (university, college, technical school, community colleges, trade schools…)
• Withdrawals require proof of enrolment, but you do not need to justify what the funds will be used for
• Any withdrawals are taxed in the hands of the child. Only grant / investment growth is taxed. Contributions are not taxed

This information is provided for general information purposes only. It does not constitute professional advice. Please contact a professional about your specific needs before taking any action.