Parents who overlook RESPs are leaving money on the table, missing out on government grants to bolster savings and the opportunity to grow their contributions on a tax-deferred basis
Although the concept behind the registered education savings plan is a simple one, its components can be complex. Specifically, a lack of understanding has led many potential investors to overlook and underuse this important savings tool.
Ottawa has continued expanding the rules around RESPs to incentivize Canadians to save for their children’s education. But to reap its rewards, clients must understand the vehicle first. Clients with children who overlook the value of RESPs are leaving money on the table, missing out on government grants to bolster savings and the opportunity to grow their contributions on a tax-deferred basis.
Many prioritize contributions to their tax-free savings account and RRSP, often forgetting about RESPs. By setting up automatic monthly deposits, clients can ensure their children’s RESP will continue to grow independently.
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