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Registered Education Savings Plan (RESP)

You want what's best for your child but are you prepared for the cost of higher education? Rising education costs could prevent many young people from acquiring skilled jobs.

To help you and your child, Rocky Credit Union offers RESP's (Registered Education Savings Plan).
An RESP is an education investment plan that offers three major advantages:

  • Contributions are not tax deductible, but earnings accumulate on a tax deferred basis
  • Accumulated earnings are taxed when withdrawn at the student's usually lower personal
  • tax rate (this is a form of income-splitting)
  • Receive an immediate bonus on annual contributions from the Canada Education Savings Grant

Member Education Savings

A Smart Way to Save for Your Family's Future.

A Registered Education Savings Plan(RESP) is a government approved plan for the purpose of providing post-secondary education funding for a beneficiary. Income earned within the plan is not taxed until it is withdrawn. A post-secondary education is critical in an increasingly competitive job market. With the costs of higher education ever increasing, each year fewer high school graduates are in a position to afford to continue their education so planning now for your family is essential. Investing in an RESP will give you and your family members more financial freedom when making the choices that will affect their futures. By starting now, you can grow your education funds by making affordable, convenient monthly deposits. Planning today for tomorrow is the smart way to realize your family's education goals.

Advantages of a RESP

  • variety of investment options.
  • flexible access to funds.
  • earnings are sheltered from taxation until withdrawn (based on the student's income, there will be minimal tax on the income).
  • government grants help your investment go further!

Contribution Limits for RESPs

  • The annual contribution limit has been eliminated 
  • Lifetime: $50,000 per beneficiary

The Subscriber

The subscriber is the registered owner of the plan and can be an individual, or an individual and his or her spouse. Only the subscriber can make contributions to the RESP; these contributions are not tax deductible. All funds contributed to a RESP belong to the subscriber(s).

The Named Beneficiary

The named beneficiary of a RESP must be a resident of Canada and have a Social Insurance Number. This person is eligible to receive Educational Assistance Payments from the plan. If a RESP is a family plan (more than one beneficiary), then each beneficiary must be "related" to the subscriber(s).

Canada Education Savings Grant (CESG)

  • The Government of Canada will pay a 20% grant on the first $2,000 of annual contributions made to all eligible RESPs for any beneficiary who is under the age of 18.
  • Annual CESG maximum: $400 per beneficiary.
  • Lifetime CESG maximum: $7,200 per beneficiary.

Effective in 2005, the Enhanced CESG will apply for families with incomes less than $75,000:

  • family income up to $37,885* - 40% on first $500 + 20% on next $1,500 (up to $500).
  • family income $37,885* - $75,769* = 30% on first $500 + 20% on next $1,500 (up to $450).

Note: restrictions and regulations apply to all grant monies.
* This amount is updated each year based on the rate of inflation.

Canada Learning Bond (CLB)

For families receiving the National Child Benefit supplement, additional education funds are available to children born on or after January 1, 2004.

Withdrawing from the RESP

Contributions to the RESP may be paid to either the subscriber or beneficiary. Investment earnings and grants are withdrawn as Educational Assistance Payments (EAPs) to finance the cost of post-secondary education at a qualifying institution; these payments are taxable to the beneficiary.

If the beneficiary does not attend post-secondary school, and there is no alternative beneficiary, unused contributions may be withdrawn by the subscriber. Accumulated earnings can be withdrawn as taxable income or transferred directly to a RRSP without triggering tax deductions. Any grant monies are returned to the government(s).

Qualified Post-Secondary Institutions

Most Canadian post-secondary institutions and programs, including correspondence courses, qualify for the purpose of receiving RESP Educational Assistance Payments. Certain foreign post-secondary institutions may qualify.

For more information, visit


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Contact Rocky Credit Union

5035 49 Street
Rocky Mountain House AB  T4T 1C1

P    403 845 2861
F    403 845 7295

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