A Registered Education Savings Plan (RESP) is a great way to save for your own child or a child you care about's education. A few of the benefits include:
1) The money you invest grows tax-free and will be taxed in the hands of the beneficiary! What this means is that the money you invest in an RESP will grow and compound and you only pay tax on the money earned when it is withdrawn for the child's education (read more about the magic of compounding here). Also, when the child goes to school, they are typically in a lower tax bracket than you, since their income is lower than your own, and so the tax paid would be less.
2) Free money from the government! Every child in Canada qualifies for the Canadian Education Savings Grant (CESG), which is 20% of the money you invest, up to a maximum of $500 per year. There are also additional grants for which you may qualify depending on your province of residence or your income level. You can read more about the other government grants Wealthsimple supports here.
You can learn more about RESPs on Wealthsimple's Investing 101 page and if you have any questions, do not hesitate to reach out to our Relationship Management team by phone at 1-855-255-9038 or send us an email.
Please note that the RESP account opening and transfer processes are not available on the mobile application just yet - we need a little more information to open and transfer an RESP than we do for a TFSA or RRSP and so it needs to be done from a web browser.