Post-secondary education is one of the biggest investments a family makes. The RESP (Registered Education Savings Plan) is the most effective tool to prepare for it: it combines structured saving, tax-sheltered growth and government grants.
Why start early?
The earlier you start, the more time your contributions and grants have to grow. A small monthly amount invested from your child's birth can make a significant difference by age 18, thanks to compounding.
Government grants
The government pays the Canada Education Savings Grant (CESG): 20% of contributions, up to $500 per year and $7,200 lifetime per child. Lower-income families may also receive the Canada Learning Bond (CLB) and an additional CESG amount — money available even without contributions.
How the RESP works
- A subscriber (parent, grandparent or relative) opens the plan in the child's name.
- Contributions grow tax-sheltered while they remain in the plan.
- When studies begin, Educational Assistance Payments (EAPs) are paid out and taxed in the student's hands — usually at a low rate.
- The lifetime contribution limit is $50,000 per beneficiary.
What if my child doesn't pursue post-secondary education?
The RESP can stay open for several years (your child may decide to study later). Otherwise, contributions can be recovered, grants must be repaid to the government, and accumulated income can sometimes be transferred to an RRSP under certain conditions. Good planning minimizes these drawbacks.
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Book a consultationFrequently asked questions
Any adult — a parent, grandparent or other relative — can open an RESP for a child, using the child's Social Insurance Number (SIN).
The lifetime limit is $50,000 per beneficiary. There is no annual limit, but the 20% grant is capped at $500 per year (up to $7,200 lifetime).
Grants and investment income are taxable when paid to the student as Educational Assistance Payments, generally at a low tax rate.