Registered Education

 Protecting your children’s education  every step of the way

Registered Education Savings Plan

Registered Education Saving Plan

Behavioural Cash Flow Planning is not a BUDGET. It is a plan that helps you manage day-to-day cash flow. It is a written plan that takes into account your income, expenses, proximity to retirement (or other major goals) assets and liabilities and recommends how much you can spend on the things you can control in order to achieve your dreams. It includes specific and clear advice on both spending and debt repayment.

A Behavioural Cash Flow Plan™ also provides guidance on future costs like purchasing your next vehicle, handling emergencies and planning for major expenses such as renovations with the exact amount you should focus on spending with expenses you can control.

How it Works

When you open an RESP account with a provider, known as the promoter, you will name one or more beneficiaries under the plan. Following this, you make regular contributions to the plan. Additionally, the government will pay applicable grants into account such as the Canada Education Savings Grant.

The promoter pays interest on the account to the beneficiaries in the form of educational assistance payments. The beneficiaries can take out money to help pay for post-secondary education.

Tax-Free Savings:

While your savings are in the RESP, they are not taxed. Additionally, the beneficiary does not have to pay tax on the contributions withdrawn. However, he or she does pay taxes on educational assistance payments.

Government Grants:

If eligible, the Canada Education Savings Grant will add an additional 20% of your contributions to the account, up to $2,500. Low-income families may also qualify for the Canada Learning Bond which can contribute up to another $2,000.

Investment Control:

With an RESP, you have full control over the investment strategy that fits your goals. Options include guaranteed interest certificates, segregated and mutual funds.

Other Contributors:

Friends or family members can also contribute to the RESP. This is a great way to help savings grow faster.

Tax Savings on Interest:

Although the interest, paid as EAPs, is taxable, it will be paid by your child at the time the EAPs are made. This is advantageous because your child is likely to have a lower tax burden than if you were liable.

36 Years of Benefits:

Contributions can be made to the plan up to the year of the 31st anniversary of the account. Your child can continue to benefit from the account up to the year of the 35th Even if your child takes a break from studies, he or she can still use the money upon returning.

Learn More

Find out more about RESPs and how you can plan for your child’s future. Contact Covenant Wealth Financial to learn about our services that can help you reach your financial goals.