RESPs

Registered Education Savings Plans are designed to assist with the cost of post secondary school. It is a government program that supplements contributions in the form of grants.

• How it works? — The government will supplement your contributions by 20% up to a maximum contribution of $2,500 per child per year which equals out to be $500 each year. Each year a child accumulates contribution room even if it isn’t used. Withdrawals can be made from the account when the child attends an acknowledged post secondary institution. Contributions are returned to parent’s tax free. Interest and Grant money is paid to the student and taxed at their marginal rate.
• General RESP rules — RESPs provide a tax shelter for contributions. There are two plan options for RESPs. A family plan is the most common of the plan types. It allows for any child to use any other child’s allotted contributions and grants. This type of plan eliminates the worry if one child should not attend post secondary schooling. The second type of plan is an individual plan. It is common for one child families.

If your child chooses not to pursue post secondary education and no other child is available to use that child’s portion of the account, provisions have been made to allow you to return the grant to the government, take back your contributions and move the earnings of the contributions and grants to your or your spouse’s RRSP if there is contribution room.

Contributions can be made in lump sums or in monthly contributions for as little as $25 a month.

• Products available for RESPs — The Biggar and District Credit Union offers two different RESP providers. Ethical Funds® provides a RESP in the form of mutual funds*. This type of account can offer the advantages of diversification and professional management. On the other hand, fees may lower returns and mutual fund investing encompasses risk.

Concentra Financial offers RESPs in the form of GICs. These RESPs provide security and peace of mind but with returns based on prevailing interest conditions.

To know which plan is most appropriate for you and your family please contact one of our representatives.
Contact us for more information

*Mutual funds are offered through Credential Asset Management Inc. and mutual funds and other securities are offered through Credential Securities Inc. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, cash balances, mutual funds and other securities are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer that insures deposits in the credit unions. Mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated. Credential Securities Inc. is a Member-CIPF. ®Credential is a registered mark owned by Credential Financial Inc. and used under licence. ®Ethical Funds is a registered mark of Northwest & Ethical Investments L.P. and is used under licence.