November 19, 2018
Did you know the Registered Education Savings Plan (RESP) entitles you to generous grants from the government? Every Canadian child with an RESP is entitled to federal grant money and in Quebec, our children also benefit from a provincial incentive. Both levels of government offer a combined total of up to $12,8001 per child to supplement your contributions!
You have until December 31st to maximize your children’s grants for the year! With the holiday season around the corner, here are a few helpful tips to get the most out of your investment:
1. TOP UP YOUR RESP CONTRIBUTIONS BEFORE THE END OF THE YEAR
When you have the means, it’s always a good move to invest $2,500 in your child’s RESP by December 31st to receive the maximum annual grant amounts to which your child is entitled.
The holiday seasons offers a great opportunity to ask friends and family for RESP contributions as gifts to help you achieve your maximization objective more easily.
2. RECOVER UNCLAIMED GRANTS FROM PAST YEARS
The annual contribution limit attracting grants is $2,500. If you haven’t invested this amount every year since your child’s birth, it’s safe to say you can recover unused entitlements2 since CESG3 and QESI4 grant room is automatically carried forward from year to year when you don’t invest $2,500 annually. Speak to your scholarship plan representative to learn how you can claim your grant entitlements retroactively. This can make a significant difference!
For more information on government grant maximization, contact your scholarship plan representative or our Customer Service at 1 877-710-RESP (7377).
3. THE RESP LOAN: BOOST YOUR SAVINGS IN THE HOME STRETCH!
If you qualify,5 the RESP Loan is an effective strategy boost your savings the last few years before your teen starts post-secondary education. It’s quite simple: the RESP Loan offered by our industry-leading partner allows you to make additional contributions to your RESP to attract and recover the applicable government grants. Once your plan reaches maturity, the loan is repaid automatically.
1. The Canada Education Savings Grant (CESG) is equal to 20% to 40%. The annual CESG limit is set at $600, and the lifetime limit is set at $7,200 per beneficiary. The Quebec Education Savings Incentive (QESI) is equal to 10% to 20%. The annual QESI limit is set at $300, and the lifetime limit is set at $3,600 per beneficiary. The Canada Learning Bond (CLB) can reach up to $2,000, for a child born after December 31, 2003, from a financially eligible family.
2. Up to $5,000 yearly.
3. The Canada Education Savings Grant (CESG).
4. The Quebec Education Savings Incentive (QESI).
5. Certain conditions apply.