In this article we will be talking about the Registered Educational Savings Plan, or the RESP, and how you can benefit from it, and also how to properly take advantage of it rather than using it passively. In Canada the benefit you get from the RESP is unmatched by any other educational fund or loan in the western world. Unlike the student loan styled plans that are offered to university going students in the rest of the world, you do not have to worry about taking out a loan at a really high interest rate going against you that you have to pay for the rest of your life, instead in the RESP system the interest rates work in your favor as the money you store collects a really high interest rate. With the idea of the 20% matching, which means that a twenty percent interest is added to your initial sum, parents can easily save up for their children. Another huge benefit is the fact that this is all non – taxable. So you do not have to pay the taxes on these savings and the interest on them. The benefits are expected to rise after the Knowledge First Financial group has become in charge of this program.
The way a lot of parents miss out on this is by not starting early on. Parents literally miss out on free money being added to their child’s education fund because they do not get the child registered early on. You can miss out on a lot of yearly benefits and bonuses being added to the RESP account if you do not start from an earlier point in time. Furthermore, you should try to maximize the receivable amount if you can afford it. Add to the basic amount till it maxes out.