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FAQ's Regarding RESP's
The owner of the account is called the subscriber and must have a valid Social Insurance Number (SIN) when the account is opened. A RESP can be owned by either an individual, or jointly with their spouse or common law partner.
The subscriber can add or remove a joint subscriber at any time.
The beneficiary must be a Canadian resident that you designate to receive payments from the RESP when they are are enrolled as a student in a post-secondary education institution.
There are two types of RESP plans: individual and family. For the individual plan, the beneficiary can be any related or non-related individual, including your children, grandchildren, family members, friends, or even yourself. For the family plan, you must be related to the beneficiaries and all beneficiaries in the plan must be siblings.
Yes. There is a lifetime limit of $50,000 per beneficiary. There are no annual limits.
A RESP is an account registered with the federal government. The Canadian Education Savings Grant is a bonus offered by the government. When funds are deposited into the RESP account, the federal government automatically matches 20% of your RESP contributions, up to $500 each year until the child turns 17, up to a lifetime limit of $7,200 per child.
The Canada Learning Bond (CLB) is a government incentive that provides up to $2,000 in free money to qualified beneficiaries born on or after January 1, 2004. Depending on your income, the government could contribute and additional 10-20% on your first $500 annual contribution.
Any withdrawals from the RESP is considered taxable income for the beneficiary, but as a student, they will be in a lower tax bracket, typically resulting in little or no tax having to be paid.
The beneficiary must be enrolled part time or full time in a qualifying post secondary institution in order to withdraw funds from the account.
You may be able to allocate their available portion to other beneficiaries or designate a replacement beneficiary, depending on whether you have an individual or family plan. Or, since the RESP can be open for 36 years after the date it is opened, you can wait to see if the beneficiary wants to attend at a later date. If you choose to close the RESP, your contributions will be returned to you, tax-free, but the grants and bonds will have to be returned to the government.
Just like any savings account with Fusion, the deposits you make to your RESP are fully guaranteed by the Credit Union Deposit Guarantee Corporation.
Contact your local branch or speak to one of our knowledgeable wealth advisors to receive advice and open an RESP account for you. Book an appointment today!
Once your RESP is set up, ask your advisor about setting up automatic payments out of your account. Watch your savings grow without having to remember to make payments!
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