Quick tips and answers about RESPs
(NC) New parents have hundreds of questions and well-meaning family and friends have plenty of advice when it comes to putting money aside for education of children. But how do you know what is really right for you and your family?
As one example, let's examine the Registered Education Savings Plan (RESP).
Why save with an RESP? Firstly, as your savings earn interest, that income is not taxed. Significant government grants also contribute to your savings potential. In an RESP, your contributions can grow much faster than in a regular savings account. When shopping for the right provider, look for funds that won't be impacted by stock market performance. For example, a new Canadian company called giraffe & friends, offers a worry-free guarantee. With that safeguard in place, even if the stock market crashes, your money is secure.
The biggest advantage of an RESP is the government support like the Canadian Education Savings Grant. It will add an extra 20% to your contributions, with a total contribution cap of $7,200 over the life of the RESP. There are also multiple provincial grants available dependent on your income and province.
Not all RESPs are created alike. When researching your options, keep an eye out for activation fees and management expense ratios (MERs), which can put a dent in your savings. giraffe & friends tell us they have launched a first-of-its-kind no-fee, guaranteed RESP to take the uncertainty out of investing in your child's future. It's an ideal solution for people seeking risk-free savings without typical bank fees or the stress of worrying about an investment strategy. It allows you to spend more time with your kids, not your financial advisor – and with an online company, you're spared the hassle of having a representative come to your house.
When it comes to your child's education decisions, the RESP is more flexible than you might think. It will support most post-secondary education that results in a degree, diploma, or occupational skill. This means that you can give your child (or grandchild, niece, nephew, or family friend) the best possible head start for success in life.
More information is available online at giraffeandfriends.com.