An RESP can be the best gift that you can ever give your child and Heritage Education Funds can manage it, because it will bestow upon your child the assurance of college education after secondary school.
Gone are the years when secondary education was all you needed to get ahead in this world.
Alongside inflation and worsening economies is the natural pickiness of all the world industries in selecting its employees. Better education means your child will have a much better chance of landing a sustainable career with great benefits in the future.
But instead of just saving for your child’s future education, why not invest your money in an RESP? An Heritage RESP or a registered education savings plan is a savings account in Canada that receives contributions from both the subscriber and the Canadian government.
The Canadian government provides up to $7,200 in contributions to individual/group/family savings plans, provided that the beneficiary of the account will go to college after secondary school.
One of the best things about RESPs is your child has time to decide when he/she would go to college. The RESP will remain valid for up to 36 years after it has matured, and within that period, your child can decide to go to college and pursue a degree, or any approved post-secondary school training program that is pre-approved by the Canadian government. In some provinces of Canada, provincial governments also make small, graduated contributions to these savings plans as well.
You can open a savings account for your child any time. But you can also open a registered education savings plan for a child that is not your child, or an adult. The policies do not change based on the blood relation of the subscriber and the beneficiary, or the person who will be receiving the payments when the savings plan matures.
Can you name yourself the beneficiary of an education savings plan? Most definitely, yes! It may sound strange and offbeat, but there is no law stating that you cannot make yourself the beneficiary if you want to study for college yourself.
While the taxation of the withdrawals or payments from the savings plan may change because you may already be employed when you begin receiving EAPs or education assistance payments, the fact of the matter is that you can benefit from an registered education savings plan yourself.
A Canadian citizen does not have to have a bank account before opening a savings plan for his/her child. While technically contributions made toward an existing plan will be recorded and kept in a balance (like a savings account in a bank), having a separate savings account is not a requirement at all.
As we have mentioned before, an RESP can stay open for the beneficiary to withdraw from for a period of 36 years from the moment that the subscriber has signed up for it. So if you opened an educational plan for your child when he was 5 years old and he goes to college 12 years later, the educational savings fund at the time of withdrawal of EAPs would also be 12 years old.