Learn about RESPs

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With the cost of getting a post-secondary education constantly on the rise, saving today to pay for your child's future studies is becoming more and more important. One of the ways you can save is by contributing to a Registered Education Savings Plan, or RESP.

Through an RESP, a parent or other person makes contributions to a fund where the money grows tax-free until the beneficiary of the plan begins full-time post-secondary studies, at which time the plan makes education assistance payments to help cover education costs.

Once the beneficiary begins to use the money in an RESP, that money becomes taxable, but because the tax is calculated based on the income level of the student, the amount of tax that needs to be paid is usually quite low.

You can get information on what RESPs are and how they can work for you online on the Human Resources Development Canada Web site

(http://www.hrdc-drhc.gc.ca/cesg/006_e.shtml). The site also includes information about the Canadian Education Savings Grant, a contribution the government makes to each RESP and has a calculator feature to help you to determine how much you should put into your child's RESP to cover the predicted cost of their post- secondary education.

The Canada Customs and Revenue Agency also has a listing of frequently asked questions about RESPs on their Web site, at www.ccra_adrc.gc.ca/tax/registered/rep_qa_e.html.