Jozyam Fontaine, conseillère en sécurité financière

What is an RESP?

What is an RESP?
What is an RESP?

The Registered Education Savings Plan (RESP) is a program implemented by the government. It is an incentive for savings, as we all know that the cost of living will not decrease. It is better to prepare for it adequately. The good news? In total, it is possible to receive $12,800 in grants for each child.

The Government of Canada contributes 20% per month to every dollar invested. If you are familiar with the stock market, have you ever seen investments that give you a 20% return each month?

The Government of Quebec also adds its touch once a year: a nice 10% paid on the total contributions.

I don't have a lot of money.
No problem. If your family income is below $47,000, the Government of Canada provides the Canada Learning Bond. It amounts to $2,000 for each child (retroactive as well). The only thing you need to do is ensure that you file your tax returns every year.

No obligation to contribute every month.
It's true that if you contribute, your child will have a little more money for their education. It's good to do so!

Personally, I started with $25 per month for my son, and the government added $10. When you have a low family income, it's very advantageous. Three good reasons to do it:
  • It can be useful for retirement: few people know, but the account can remain open for 35 years. Your child has 35 years to decide what they want to do. If we do a quick calculation, in 35 years, it could be a foundation for retirement that has grown tax-free!
  • It encourages savings discipline: imagine every 20th day of the month, it's not even your own money that is being invested, but the government's. And if your child doesn't pursue their education, you can retrieve the entirety of your contributions along with the accumulated interest through the program.
  • It's a great gift for your child: instead of toys for Christmas or birthdays, uncles, aunts, grandparents, godparents can contribute to the savings you're making for your children.

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