Give Your Child A Bright Future With Help From RESP

bulram | March 3, 2012

Give Your Child A Bright Future With Help From RESP

Parents are always eager to know and develop new ways by which they can ensure their child’s future and insure them well. Education is one of the most important step they want to get assure of in this direction. No doubt, what education you provide to your child decides the upcoming career which in turn is associated with the quality of life he or she enjoys throughout the life. This is the reason that every parent is so much concerned about their child’s education plan.

RESP – Registered Education Savings Plans

Savings play a great role in order to fulfill all the dreams parents have seen for their children. Education, no doubt, occupies a large portion of the expenditures that from now you are going to invest on your child. Starting from his or her very first class to tuitions and degree education, including all other basic amenities related to education, you need to save a considerable amount of your salary for the safe future of your child. Also, the rising prices add to the condition. According to a recent statistics issued, the inflation in annual tuition fees in Canada amounts to about 4.3 percent every annum.

Now the question arises, what should be done or what should be the major step to solve out this problem without needing to undergo nay debt management? Government has made your problems easy with the introduction of RESP which stands for registered education savings plan. Government had taken this step in order to provide the country’s young generation to have a bright future in addition to helping the parents in coping against inflation.

RESP is a type of education plan issued by the government which comes under an act called federal income tax act and provides the families to save the post education cost over their children education. The help provided by the government rises on the basis of tax shelter till the time completes his schooling, college and earns degree.

Government provides the help the form of various grants and scholarships. Canada education savings grant is one such help offered by the government, it adds about 20 percent to all contributions that are being made for the safe future of the child with the grants having the limit of $500 on a child per year. Income also plays a great role in deciding the amount of grant for which you are eligible.

There are also certain provinces who entertain their citizens with provincial grants. Alberta was the first such province to take such an initiative. In 2005, a grant was issued by Alberta called as Alberta centennial education savings. This grant was made for parents whose children came on earth after the year 2004. Also, an additional aid of $100 is being provided by the government when eligible children reach the age of 8, 11 and 14.

You should start thinking of your child’s future if you haven’t started thinking yet. If not interested in any such grants, you can even contribute to your child’s future by saving a part of your money at home.