* Take advantage of tax savings :
RESPs offer two significant tax benefits which aren't available through
First, your RESP will grow through tax-sheltered interest, dividends and capital gains. Because
no dollars go towards paying taxes at this stage, all of the money remains in the plan where it can generate
more growth. The result? Your RESP will increase in value more quickly than non-registered plan.
Second, when it comes time to withdraw the interest, dividends and capital gains from
the plan to pay your child's education, the tax rate will be low. This is because growth in RESPs is taxed at the student's
tax rate. Since most students have much lower income than their parents, this " income splitting " stategy results
in significant tax savings.
* New government grant makes RESPs even more attractive :
RESPs are a popular way to save for higher education -- probably because they offer a terrific combination
of tax savings and an annual government grant of 20 percent of the first $2,000 --- up to a $400 per beneficiary per year