Question

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

Homework Answers

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Savings Plan (RRSPs) and Registered Education Savings plan (RESP) the earnings are compounded on a tax free basis until withdrawn.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.

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