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Both RRSPs and RESPs offer the advantage of having earnings compound on a tax-free basis. True...

Both RRSPs and RESPs offer the advantage of having earnings compound on a tax-free basis.

True or False

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Answer #1

Both RRSPs and RESPs offer the advantage of having earnings compound on a tax-free basis. - This statement is TRUE. Under a Registered Retirement Savings Plan (RRSPs) and Registered Education Savings plan (RESP) the earnings are compounded on a tax free basis until withdrawn. While RRSP is to ensure a person has enough money for savings at the time when he/she is old, RESP is to ensure that there is good amount of money for the child's university education.

Please let me know if you have any further questions via comments and all the best :)

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