RESP — Registered Education Savings Plan
Save for your child’s education and collect a federal grant of 20 percent on what you contribute.
An RESP is the most straightforward return available to a Canadian parent. The Canada Education Savings Grant adds 20 percent to your contributions — up to $500 a year per child, to a lifetime maximum of $7,200 — and the investments grow tax-sheltered until your child withdraws them.
Because withdrawals are taxed in the student’s hands rather than yours, and students generally have little other income, the tax on the way out is usually minimal. Lower-income families may also qualify for the additional CESG and the Canada Learning Bond, which pays into the plan even without a contribution.
Who this is for
- Parents and grandparents saving for a child’s post-secondary education
- Families with more than one child, who may prefer a family plan
- Anyone who has not yet claimed grant room from previous years
- Newcomers to Canada opening a first registered plan
What you get
20 percent government grant
The CESG matches 20 percent of contributions, up to $500 per child per year and $7,200 over the child’s lifetime.
Catch up on unused grant
Unused grant room carries forward. You can claim up to $1,000 of grant in a single year by contributing $5,000.
Tax-sheltered growth
Investment income compounds inside the plan with no annual tax, for the fifteen or more years until it is needed.
Taxed in the student’s hands
Withdrawals are taxable to the student, who typically has little income and pays little or no tax on them.
Family plans for siblings
One plan for several children lets you move funds between them if one does not pursue post-secondary study.
Additional grants and the Learning Bond
Lower-income families may receive an enhanced grant rate plus the Canada Learning Bond, which requires no contribution at all.
Questions we get asked
Contributing $2,500 per child per year captures the full $500 annual grant. If you have unused room from earlier years, $5,000 captures $1,000 of grant.
You keep your own contributions. The grant is returned to the government. Investment growth can often be transferred to your RRSP if you have room, subject to conditions.
RESP withdrawals are income to the student in the year received and can affect needs-based assessments. It is worth planning the timing of withdrawals.
As early as possible. The grant is capped annually, so starting late means years of grant you can only partially recover.
Get a resp quote
Tell us a little about who needs covering. We will compare the market and come back with two or three options worth considering, with the trade-offs spelled out.
- Advice and paperwork cost you nothing
- Available in English, Punjabi and Hindi
- Most quotes returned the same business day