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RESP

A Registered Education Savings Plan (RESP) is a government approved plan for the purpose of providing post-secondary education funding for a beneficiary. Income earned within the plan is not taxed until it is withdrawn.

A Credit Union Registered Education Savings Plan is the smart way to save for your family's future. A post-secondary education is critical in an increasingly competitive job market. Each year, fewer high school graduates are in a position to afford to continue their education. With the costs of higher education increasing almost every year, early planning is essential. Let Carpathia Credit Union help you invest for your family's education.

How An RESP Works

• Choose an individual plan, or a family RESP for more than one child.
• There are no foreign content restrictions on your RESP account, so you can take full advantage of international investment opportunities.
• There is a lifetime limit of $50,000 for each child (named in one or more RESPs). Although there are no annual limits on contributions made to an RESP, the Canada Education Savings Grant will only be paid on the first $2,500 of contributions made every year. If the child has accumulated grant room, then the Canada Education Savings Grant will be paid on the first $5,000 of contributions made per year.
• Receive a basic CESG payment which is a payment of 20% on RESP contributions made in respect of an eligible beneficiary, up until the end of the calendar year in which the beneficiary turns 17.
• Carry forward unused grant room; since 1998, all children, whether they already have RESPs or not, began accumulating grant contribution room.
• Unlike an RRSP, contributions are not tax-deductible, however, your investment income compounds on a tax-deferred basis.
• Income earned is taxed at the child's personal tax rate when withdrawn (this is a form of income splitting).
• Use RESP savings to pay for tuition at universities, colleges, trade schools and technical institutions both inside and outside Canada; pay for books and reasonable living expenses too.
• If one of the beneficiaries of a family plan does not attend school, the savings can be used by another child.
• If the beneficiary of an individual plan does not attend school, he or she may be replaced by a blood relative.
• Transfer RESP income to your RRSP or your spouse's, as long as contribution room still exists.