A Registered Education Savings Plan is an amazing way to save for your child’s future. Instead of worrying about the enormous expenses usually involved in sending a child to college or university, you can relax in the knowledge that your child will have a great education and a bright future ahead of them. There are several different types of plans, investments, and so on so it is always a good idea to research heritage education funds | Registered Education Savings Plans before you commit to one. This article has you covered! Read on to learn five essential facts about Registered Education Savings Plans.
1. YOUR CHILD MUST ATTEND QUALIFYING SCHOOLS AND PROGRAMS
Unfortunately, a Registered Education Savings Plan does not allow your child to attend any college or university and still receive their funds. Your child must become a part of an education program that qualifies for the savings plan. And this program must take place at an educational institute that also qualifies. However, several schools are compatible with a heritage RESP -Registered Education Savings Plan so it shouldn’t be too much of a problem.
2. TAXES ARE SOMEWHAT COMPLICATED
When you sign up for a Registered Education Savings Plan, you will still need to pay taxes on whatever amount of money you contribute to the savings plan. It seems a little unfair because you are literally donating to your child’s future, but that’s the way the savings plan work. However, you do not have to pay taxes on the income generated from your Registered Education Savings Plan, which is nice.
3. THE LIFE OF A REGISTERED EDUCATION SAVINGS PLAN IS LIMITED
Heritage RESP (Registered Education Savings Plans) can only accept contributions for twenty-one years and termination of the savings plan is required after twenty-five years. Though it might be annoying that there are time restrictions at all, twenty-plus years is certainly enough time to save money for your child’s education. Related to this is the added stipulation that at least one contribution to the plan must be made before your child turns sixteen – a helpful fact to keep in mind.
4. MORE THAN ONE PERSON CAN CONTRIBUTE TO YOUR CHILD’S REGISTERED EDUCATION SAVINGS PLAN
So you want to save for the future education of your child? That’s wonderful! You may prefer to do all the contributing on your own, but it can also be a good idea to ask your spouse, your child’s grandparents, or even aunts and uncles if they would be interested in adding to the Registered Education Savings Plan. They might have been waiting for this chance to contribute to their niece, nephew, or grandchild’s future.
5. THE BENEFICIARY OF THE REGISTERED EDUCATION SAVINGS PLAN NEEDS TO HAVE A SOCIAL INSURANCE NUMBER
If your child does not have a Social Insurance Number (SIN) yet, you need to make getting them one a top priority. After all, any saving you do for them in an heritage RESP (Registered Education Savings Plan) will be useless if they can’t access their funds when it really matters.