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REGISTERED EDUCATION SAVINGS PLAN

Build a better future.

You want the best for your child. We have the perfect way to invest in their future. A Registered Education Savings Plan (RESP) can help you save for a child's education and expand their horizons.

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Maximize the benefits.

Contribute early.

As with any investment, the earlier you start, the better. As soon as your child has a Social Insurance Number (SIN) they’re eligible to be the beneficiary of an RESP.

Tax-sheltered returns.

As long as your money stays in the plan, you don't pay taxes on the investment returns. This means your investments grow faster than they would in a non-registered account.

Claim unused grants.

Contribute more if you’ve missed contributions from previous years and receive unused grants for a given year. This way you maximize the benefits of the RESP.

Invest grants automatically.

Once you’ve made a contribution, the grants you’re entitled to are paid directly into your RESP and automatically invested according to your investment choices.

Set it and forget it.

Make your contributions as scheduled transfers or one-time payments. The limit to receive the maximum grant is $2,500 per beneficiary per year.

Grants that make all the difference.

Boost your savings by taking advantage of government grants.

Canadian Education Savings Grant (CESG)

Under the CESG program, the federal government matches 20% of your annual RESP contributions, up to a maximum of $500 per year, with a lifetime limit of $7,200. Depending on your income, you may be eligible for additional CESG payments. For more information, refer to the account features section.

Canada Learning Bond (CLB)


The CLB provides $500 in the first year and $100 per year after that to RESP beneficiaries (born in 2004 or later) who meet the conditions. For more information, refer to the account features section.


Quebec Education Savings Incentive (QESI)


If your child is a resident of Quebec, you may be eligible for additional grants equal to 10% of your annual RESP contributions, or up to $250 with a lifetime maximum of $3,600. Depending on your income, you may be eligible to receive additional QESI grants. For more information, refer to the account features section.

What's the purpose of an RESP?

  • A savings plan.

    Created by the federal government, the RESP is a savings program designed to help you finance a child's post-secondary education. If you’re a parent, guardian, grandparent, other relative or friend (called the subscriber), are over 18 years of age and reside in Canada, you can open an RESP for a child (called the beneficiary).

  • Cover tuition fees and other education costs.

    You can use an RESP to cover any education-related expenses once you’ve provided proof of enrolment in a qualifying post-secondary program. This money can be used to pay for school expenses like tuition, books and transportation.

Amounts accrued after 18 years.

A chart shows the growth of contributions with no RESP versus an RESP over an 18-year period. With no RESP, $23,760 of contributions plus $11,549 from earnings for a total amount of $35,309. With an RESP, the same contribution amount has $7,128 from grants and $14,854 from earnings for a total of $45,742.

How much money is this?

RESP advantage: A typical 18-year base example.

  • The subscriber contributes $110 at the beginning of each month;

  • The account earns an annual return of 4.25%, which is considered a conservative return by the IQPF for a balanced portfolio;

  • Taxes on the earnings and grants are then paid by the student, whom is generally in a lower tax bracket;

  • The calculations only take into account the basic grants: Quebec and federal;

  • QESI grants are generally paid in May of the year following the contribution and are automatically invested.


Open an RESP in 5 easy steps.

The recipient must have a Social Insurance Number (SIN) to be eligible.

Speak with a Laurentian Bank advisor to create an investment strategy that’s right for you.

Figure out which type of plan is best for you: family or individual.

Decide how you want to invest with the help of your advisor.

Determine how much and how often you want to contribute to maximize your benefits.

Account features.

Feature

The details

Investments

Laurentian Bank Group of Funds, managed by Mackenzie Investments (LB or LW series only).

Contributions

• Annual cap of $2,500 for maximum grants. Excess amounts don’t qualify for additional grants.

• You can claim unused grants for a previous year by making a second contribution of up to $2,500.

• Annual lifetime limit of $50,000 per beneficiary.

• Contributions belong to the subscriber.

Canada Education Savings Grant (CESG)

• The basic CESG is equal to 20% of your annual contributions, to a maximum of $500 per year per beneficiary.

• Paid into your RESP on behalf of the beneficiary until the end of the year in which they turn 17.1

• Low-income families may be eligible to receive an additional amount.

• The maximum lifetime CESG amount is $7,200.

Canada Learning Bond (CLB)

• Available to low-income families and eligibility criteria dependent on the age of the child (born in 2004 or later), the number of eligible children in the family and family income.

• The maximum amount of this grant is $2,000 in an eligible child's RESP: $500 in the first year and $100 in following years until the child turns 15.

Quebec Education Savings Incentive (QESI)

• The basic QESI is 10% of annual RESP contributions, up to a maximum of $250 per year per beneficiary.

• Low-income families can receive an additional $50 per year.

• The maximum lifetime amount is $3,600.

Beneficiaries

Family plan:

• You may designate one or several beneficiaries.

• Beneficiaries must be related to the subscriber by blood or legally adopted and under the age of 21 at the time of their designation.


Individual plan:

• You may designate one beneficiary, including yourself.

• There are no age or relationship restrictions on the beneficiary.

Contribution period

You can make contributions for up to 31 years after the RESP is opened.

Expiry

The RESP can’t remain open for more than 35 years.

Educational Assistance Payment (EAP)

• Payment made to the beneficiary when he or she starts post-secondary education.

• EAP is made up of accumulated grants and income.

• Limit of $5,000 for the first 13 consecutive weeks of study. No limit thereafter.

• Beneficiary must add EAP amounts to taxable income in the year they’re withdrawn.

• Contributions remain the property of the subscriber. They can be reclaimed after the first EAP payment is made.

Options if the beneficiary doesn’t pursue post-secondary education

The subscriber can:

• Leave the funds in the RESP;

• Designate a new beneficiary;

• Transfer the funds to their RRSP;

• Close the RESP;

• Transfer the funds to a Registered Disability Savings Plan (RDSP).

Accumulated Income Payment (AIP)

The AIP is made up solely of the returns generated by the plan. An AIP may be paid if both of the following conditions are met:

• The person receiving the AIP is the subscriber of the plan; and

• The subscriber is a resident of Canada.


Also, at least 1 of the following 3 conditions must be met:

• The RESP has been open for at least 10 years;

• Each beneficiary who’s received contributions has reached 21 years of age and isn’t entitled to receive Educational Assistance Payments; or

• The beneficiary has died.


An AIP can be transferred to the subscriber's RRSP up to a maximum of $50,000 if the subscriber has unused RRSP room. Some or all of the AIP can be transferred to a spousal RRSP. If the AIP isn’t transferred to an RRSP, it’s subject to double taxation, namely tax on investment growth at the regular tax rate plus 20% (or 12% in Quebec).

Helpful tips and resources.

Your questions answered.

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