Education Plans | Investments | Simplii Financial

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Education plan

Giving them a head start

There are many benefits to saving for your child's post-secondary education with a Registered Education Savings Plan (RESP)

The money is there when you need it

We make it easy to start early and contribute regularly, with a minimum of $25 a month. You can save for when you need funds for your child's education.

Government contributions

The federal government may add to your RESP contributions (up to a maximum of $500 per year, per child) with the Canada Education Savings Grant (CESG). The CESG is payable until the end of the calendar year a child turns 17, and the maximum lifetime CESG payment is $7,200. Additional grants may be available depending on your financial situation and your province of residence.

Tax-sheltered Growth

Although contributions are not tax-deductible, all investment income generated in the RESP is tax-sheltered as long as it remains in the plan.

Flexibility

You can decide how much money should be withdrawn and when it should be withdrawn. The withdrawals can be used for a variety of education costs, including tuition, books and living expenses.

Tax savings

When money is withdrawn and used to pay for the child's post-secondary education, the plan earnings and government contributions are taxed in the child's hands. As a student with low or no income, the child may pay little or no taxes on the money.

Types of RESPs

Family plan RESP

With a family plan, you (the subscriber) can name more than one child as a beneficiary of the plan. Each beneficiary must be your child, grandchild, great-grandchild or sibling, by birth or adoption. If the child for whom the plan was originally intended decides not to go on to postsecondary education, the funds can be allocated to another child in the plan.
Individual plan RESP

These plans allow for only one child to be named as beneficiary. He or she does not have to be related to you.
What if the child does not pursue higher education?
If you have a family plan, you can use the earnings to pay for the education of another child the plan. With an individual plan, you may have the option of naming another beneficiary, but the total CESG may have to be returned to the federal government.

If no beneficiary pursues higher education, you may be able to transfer up to $50,000 tax-deferred from the RESP to your or your spouse’s or common-law partner’s RRSP subject to these special conditions:
- The RESP must have been in effect for at least 10 years
- All RESP beneficiaries must be at least 21, and not currently enrolled in post-secondary education
- You must be a Canadian resident
- In addition, normal RRSP contribution limits apply. If you do not have sufficient RRSP contribution room, you may be able to withdraw plan earnings, however, some restrictions and additional taxes may apply.
Other useful RESP information
- In order for an RESP to receive the federal government's CESG, the child named in the RESP needs a Social Insurance Number.
For an RESP mutual fund account comprised of individual funds, government assistance is paid into the plan monthly and invested in Class A units of CIBC Money Market Fund. For an RESP mutual fund account comprised of a portfolio, government assistance is paid into the plan monthly and is allocated proportionately to the various mutual funds in the portfolio.

If you bank with us, sign in to your online banking or call 1-888-723-8881 to apply.

Have questions?

Call us at 1-888-723-8881

Email us at talktous@simplii.com