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  Canada Immigration Forum > About Canada > Financial Planning > WHAT IS RESP - REGISTERED EDUCATION SAVINGS PLAN
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WHAT IS RESP - REGISTERED EDUCATION SAVINGS PLAN




meitsme
Senior Desi
Member since: Feb 06




Posts: 467
Location:


Good to know about advance withdrawal of additional $14K contribution.

I don't see anything wrong to contribute $14 at early stage if you commit to not withdraw before child goes to university. It will grow tax free.

Do you think most parent aware of it and contributes $14K to grow tax free? (May be most of us are not exceeding the TFSA limit. So, this may not make sense for them)


Quote:
Originally posted by myjughead

Hi there,

Once $36k are contributed in RESP it will not attract any grants. So yes, you can deposit balance of maximum allowed limit $14K to grow tax free.

Further, when you withdraw, as per CRA rules, your contributions will come back to you tax free but the grants equivalent to $14K contribution will be returned to CRA, because CRA does not recognise that this $14K was additional contribution above $36K. For them, if the money is withdrawn from RESP before kid goes to university, equivalent grant provided to date must also be returned.

Thanks


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Last edited by: Monica.admin on 31-01-17 16:08:04
Post ID: 233849 31-01-17 13:17:57
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myjughead
Junior Desi
Member since: Apr 11




Posts: 12
Location: Ontario, Canada


You are right meitsme, not many people have $14K to contribute in one shot for RESP and given the other investing and saving vehicles (RRSP and TFSA),not much is left over in most cases.

Regards,


 
Last edited by: Monica.admin on 31-01-17 14:19:52
Post ID: 233850 31-01-17 13:26:55
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mkannuri
Senior Desi
Member since: Nov 06




Posts: 409
Location:


Quote:
Originally posted by myjughead
Further, when you withdraw, as per CRA rules, your contributions will come back to you tax free but the grants equivalent to $14K contribution will be returned to CRA, because CRA does not recognise that this $14K was additional contribution above $36K. For them, if the money is withdrawn from RESP before kid goes to university, equivalent grant provided to date must also be returned.
Thanks



As per the above statement,
IMO the 14k above 36k will not attract any govt grants such as CESG (max 7200)..
is my assumption is right or still we can get additional grants above 36k contributions?


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MK

 
Post ID: 235048 30-05-17 10:56:42
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Contributors:
Fido(1)  meitsme(5)  mkannuri(1)  myjughead(6)  
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