How does
the RESP work?
An RESP is to education what an RRSP is to retirement: it allows you to build up savings to put toward your child’s post-secondary education. This is the most precious gift you could offer your child: the possibility to pursue the career of their dreams.
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When your child starts post-secondary education, you recover the amounts you invested at the pace you choose. You don’t pay any taxes on the amounts returned to you. Your child receives the grants and interest generated on the total balance of the RESP account through Educational Assistance Payment (EAP). Since students generally have a lower tax rate, the tax bill to pay on EAPs is often minimal.
If your child doesn’t pursue a post-secondary education, you can:
- Designate another child in the family
- Withdraw your original contributions tax free
- Transfer your accumulated investment income to your RRSP under certain conditions
Choosing to invest in an RESP at iA Financial Group is choosing security. It’s also a guarantee, depending on your choice of investments, that the amounts deposited in the RESP will be fully available when your child needs them.
Choose what’s best for your child’s future: invest in an RESP.
RESP loan
To receive the maximum in government grants
Choose an RESP loan and grow your money without
changing your budget.
How can I accumulate more?
To encourage education savings, the Government of Canada and some provincial governments provide annual grants based on how much you contribute to your child’s RESP. Combined with your regular contributions, this generous government assistance deposited in your RESP gives a significant boost to your savings.
Depending on your family income, you could be eligible for an additional grant. All your investments, grants and interest grow tax free until withdrawal.