{"id":2457,"date":"2025-11-21T20:39:56","date_gmt":"2025-11-21T20:39:56","guid":{"rendered":"https:\/\/www.worldpumpnews.com\/?p=2457"},"modified":"2025-11-21T20:39:56","modified_gmt":"2025-11-21T20:39:56","slug":"will-resp-gifts-make-a-blue-christmas-or-help-the-kids-in-your-life-national","status":"publish","type":"post","link":"https:\/\/www.worldpumpnews.com\/?p=2457","title":{"rendered":"Will RESP gifts make a \u2018Blue Christmas\u2019 \u2014 or help the kids in your life? – National"},"content":{"rendered":"

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As the holiday shopping season approaches, children will be looking forward to seeing what Santa Claus stuffs their stockings with this year.<\/p>\n

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If you\u2019re struggling to think of a present for your kids, grandchildren, nieces or nephews, personal finance experts have a suggestion \u2013 put money into a Registered Education Savings Plan (RESP).<\/p>\n

\u201cMy son said to me this week, don\u2019t get the kids any more toys and don\u2019t get us any more stuff for Christmas because we\u2019ve got too much stuff,\u201d said David Christianson, senior wealth adviser at National Bank and a grandfather to two young girls.<\/p>\n

Instead of toys, Christianson has decided to make a large contribution to their RESP accounts.<\/p>\n

While a five-year-old may not jump up in excitement at the prospect of a tax-deferred investment account, Christianson says it\u2019s the kind of present that can grow in the long term.<\/p>\n

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\u201cIt\u2019s a very responsible present,\u201d he said.<\/p>\n

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An RESP is essentially a saving and investment account, much like an RRSP or TFSA, but focused on saving for a child\u2019s education.<\/p>\n

\u201cIt\u2019s an account that\u2019s set up by the Government of Canada to allow you to invest into a child\u2019s education,\u201d said Darren Robinson, a license mortgage broker and life insurance agent.<\/p>\n

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This kind of account has two major benefits over simply squirreling money away into a savings account.<\/p>\n

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First, for every dollar you put in, the government puts in 20 per cent. However, the ceiling for that is $2,500 in annual contributions.<\/p>\n

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\u201cIf you put in $2,500 (in a year), you almost instantly got $3,000 earning tax-deferred investment,\u201d Christianson said.<\/p>\n

The other big advantage is that like any other investment account, the money grows a lot faster than a regular savings account.<\/p>\n

\u201cYou can put these into stocks and market indexes that gain 12 to 15 per cent per year. There is some significant growth that can happen with these accounts,\u201d Robinson said.<\/p>\n

A third benefit is that while any investment growth will be taxed at the time of withdrawal, the original capital contribution comes out tax-free.<\/p>\n

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\u201cThey don\u2019t need more toys, they don\u2019t need bikes and things,\u201d Christianson said of his granddaughters.<\/p>\n

He said making a long-term investment is something that will take the pressure off their parents.<\/p>\n

\u201cI think it\u2019s a wonderful thing for a grandparent to give as a gift at birthdays, Christmas, or whatever celebration the family engages in,\u201d he said.<\/p>\n