What is a Registered Education Savings Plan (RESP)?

An RESP Plan (Registered Education Savings Plan) is a savings plan that allows you to save for your child’s future education costs. This education savings plan also gets registered under Canada’s Income Tax Act. This means that any income on your savings contribution within an RESP is tax-free until your beneficiary is ready to enroll into a post-secondary education where the earnings are then taxed towards your beneficiary. This is beneficial because students generally pay little to no tax.

What is Heritage Education Funds?

Heritage Education Funds focuses solely on Registered Education Savings Plans (RESP’s) for Canadians and have been operating since 1965. Unlike most banking institutions, we focus solely on RESP’s – making us RESP experts in Canada for over 50 years.

Do I get taxed on funds released from the savings plan?

As a contributor you do not get taxed on the EAP payments – instead, they are taxable to the beneficiary. In the event that the beneficiary does not embark on their post-secondary education, then under the Self-Determined Option – the subscriber(s) can take out the interest accrued in cash but will be required to pay regular taxes on the amount withdrawn plus an additional tax of 20% (12% federal and 8% provincial for Quebec residents) to the government.

How secure is my investment?

We do not invest in stocks or mutual funds which are considered high risk. Instead, the majority of our funds are invested in bonds that are backed by federal, municipal and provincial governments while the remainder is invested in bank deposits, short term investments, principal protected notes or GIC’s.

For more questions, please contact us today at 1-800-739-2101 or fill out our contact us form and one of our RESP experts will be happy to clarify any questions you may have.