Increasing the Value of Your RESP

If you are a Canadian resident looking to help a child or loved one pay for their college education, an RESP could be a great solution for you. A Registered Education Savings Plan, or RESP, allows a subscriber to partner with a promotor to provide payments to students who are completing their education. Ask for specialists at

How it Works
The subscriber (the person looking to provide funds) will sign a contract with a promotor (a financial organization), and name the beneficiary (the student to whom the money should be paid). The subscriber makes contributions to the RESP, and any applicable grant money can be put into the RESP as well. The promoter is responsible for paying out contributions and accumulated income to the beneficiary as needed. The money can be held within the contract without taxation, and can be returned to the subscriber tax-free. Therefore, this is an ideal way to save and fund your student's education.

Types of Plans
A family plan is the ideal type of RESP for subscribers who want to fund more than one beneficiary. Under this plan, the beneficiaries must be related by either blood or adoption to the subscriber. Additionally, the beneficiaries must be under 21 years of age at the time s/he is named in the plan.
A specified plan is more complex. Under this plan, only one beneficiary can be included. Additionally, the beneficiary cannot be changed after the 35th anniversary of the plan. This plan must be completed by its 40 year anniversary.

Increase the Value of Your RESP
In order to maximize the benefit of your RESP, it is recommended to start the fund early and contribute often. Since the money contributed is held tax-free, it is a wise investment strategy. Additionally, students under 18 will have a certain amount of money contributed to their plans by the Canadian government under the Canada Education Savings Grant (CESG), which will increase the money available to your student when s/he enters the post-secondary institution.

A post-secondary education is an expensive endeavor in the current economic climate. Contributing to a RESP will help to secure financing for your child or loved one.