Did you know that approximately 80% of Canadian parents aren't aware of the benefits of opening an RESP?
To help you present the benefits of this savings vehicle to your clients here are the answers to the most frequently asked questions:
- Must my child attend university or college in order to benefit from an RESP?
Not at all! Many technical and professional training schools are eligible for educational assistance payments.
💡 Technical and professional training schools: share the List of Certified Institutions with your client.
💡 University or college: share this directory with your client.
Will I loose my money if my child decides not to pursue post-secondary education?
Absolutely not! Reassure your clients that they will not lose their contributions. The grants, however, will have to be returned to the government at the time of disbursement. So it may be wise to avoid winding up the RESP if the child does not immediately pursue post-secondary education. They may change their mind!
hIf I have the means to pay for my child's education, should I still save in an RESP?
Yes! It is a very beneficial savings vehicle! In addition to enjoying grants of up to 30% (depending on the province), the money in the RESP can be used to pay for things other than education, i.e. the purchase of a vehicle to enable the child to get to school, or to pay their rent if they live away from home during their studies. The child simply needs to hold a valid proof of enrolment at a recognized institution to be able to withdraw funds from the account.
Is it too late to open an RESP for my child?
RESPs can be opened at any time. However, to be eligible for grants, your client must invest a minimum amount before the end of the calendar year in which the child turns 15. Government grants are paid until the end of the calendar year in which the child turns 17. Ideally, you should start as soon as possible, but your client can catch up on previous years' grants one year at a time.
💡 Your client can contribute until the 31st year after the RESP was opened and the RESP must be liquidated by the 35th year after it was opened.
My child wants to study abroad. Can they use the funds in the RESP?
Of course! A university, college or other post-secondary educational institution located outside Canada that offers post-secondary education may be recognized for education assistance payments. The list of Designated Educational Institutions recognizes over 2,800 foreign institutions.
Taking the time to establish a disbursement plan is essential. Your client can benefit from the flexibility and perks of this unique savings vehicle.