Few things are more important to parents than making sure that their children have every advantage possible. For parents around the world, one of the top such priorities is making sure their children receive the best university education possible, which in turn means saving enough money so you can afford the best such education. You never want your child’s progress or educational opportunities to be stifled due to your inability to pay for them. A Registered Education Savings Plan from Heritage Resp can do a great deal to ease the burden on parents – and here are just a few ways how.
1. A Favourable Cost-Benefit Ratio
First, it’s important to note that an RESP has a very favourable cost-benefit ratio in the final analysis in many cases. This is due in no small part to the fact that the end goal, being able to afford a quality university education, is such a priceless commodity that making it more affordable can justify a lot. By investing the requisite amount of money into the system and taking advantage of the benefits described below, you can build up your economic resources over the years so that, when the time finally comes for your child to start looking for universities, they have years’ worth of invested money compounded with interest and subsidies with which to pay tuition.
2. Interest Rates Over Time
That’s another major benefit of investing in an RESP. When you set aside money on your own, you might keep the money, but it’s simply “idle,” and not growing or gaining value. When you invest your money in an heritage education funds RESP, by contrast, you can count on that money to accumulate interest, thus allowing you to have even more capital at the end of the day to spend on your child’s education. Interest rates will vary depending on the province, the amount you invest, and the amount of time you keep your RESP open and running, so you’ll want to do a little research to find the setup that’s right for you.
3. Province Variance
As stated, the difference between provinces can play a huge role in the effectiveness of your RESP. What works in Ontario might not work as well in Alberta, for example, and vice versa. Some provinces also offer their own RESPs as well as the nationally-sponsored options.
4. Getting Subsidies
And that, in turn, brings us to one of the biggest motivating factors behind investing in a Registered Education Savings Plan. In the same way that your heritage RESP can accrue interest over time, it can also get subsidized by the national and often provincial governments. This can be a huge boost over private bank holdings, which would naturally not be subsidized. The size of subsidy you receive will again vary based on several factors, including the amount of time you’ve had your RESP open and what you have invested in it. While they are capped at a certain level, these subsidies can help grow your capital dramatically.
All of this and more helps explain how RESPs Canada can make affording your child’s education that much easier.