The post secondary education is very valuable in today's fast paced world. Higher education makes a person capable of achieving success in life both personally and professionally. The more a person is educated, the more he/she earns thus contributing to the economy and building the nation. Today, the cost of post secondary education in Canada is beyond the reach of common man. Only the rich and the affluent can afford it.

The federal government has come up with some education plans that offer financial help to the parents for the post secondary education of the children. Most of the plans offer up to $500 per child per year to a lifetime limit of $7,200. Parents need to save sufficiently to afford the higher education of their children. The Registered Education Savings Fund, RESP come to the rescue of the distressed parents.

What is RESP?

The Registered Education Savings Plan is an investment savings plans that allows parents, grandparents or guardians of the child to invest regularly and save for the future of the child. The plans works by investing the contributed funds in a low risk investment opportunity in the market, that earns promising returns. This way the parents are self sufficient to fund the post secondary education of their children.

Benefits of RESP

The RESP plan is approved by the federal government and there are many benefits of RESP plan. The returns that the parents earn on the money contributed in the plan are tax sheltered under the Income Tax Act as long as the money is in the plan. The education grants sponsored by the Government of Canada like the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB) are associated with the RESP plans. The child gets the financial aid from all or some of the programs which add to the money invested and the interest earned in the plan.

How to start a plan?

To start a RESP plan, the first step involves choosing a service provider and selecting the right plan. To start a RESP plan, the subscriber of the plan has to provide the Social Insurance Number (SIN), the permanent residency card and the birth certificate of the child.

Withdrawals

The child, technically the beneficiary of the plan can withdraw funds from the plan as and when required. He/she needs to provide the proof of enrollment in a specialized or reputed course from a reputed college. The withdrawn amount is taxed in the hands of the beneficiary which usually tends to be very less or zero since the students usually have very little or no income.

Right provider

Many families have benefited from the RESP plan across Canada. RESP plans are available with all the banks and the financial institution. Every institution offers the same kind of plans but the returns differs extensively. The Heritage Education Funds sells RESPs exclusively. Since 1965, the Heritage RESP Plans have been helping families to save money for the future education of the children. The Heritage plans are highly flexible and suits the needs of families with every type financial background.

The value of RESP is irreplaceable in the process of building child's future.