Registered Education Savings Plan

RESP

Save for your child's education with government matching grants. Get up to $7,200 in free government money per child.

$50,000
Lifetime Contribution Limit
$7,200
Max Government Grant (CESG)
20%
Government Match Rate

Professional Explanation

A Registered Education Savings Plan (RESP) is a government-supported savings vehicle designed to help Canadian families save for post-secondary education. Unlike RRSPs, contributions to an RESP are not tax-deductible. However, investment growth is tax-deferred, and significantly, the Government of Canada provides matching grants that can substantially boost savings.

Core Features:

  • • Contributions: Not tax-deductible (after-tax dollars)
  • • Growth: Tax-deferred until withdrawal
  • • Withdrawals: Taxed in the beneficiary's hands (typically lower tax bracket if student has minimal income)
  • • Account duration: Up to 36 years
  • • Lifetime contribution limit: $50,000 per beneficiary

Canada Education Savings Grant (CESG):

20% Match
On first $2,500 per year
$500
Annual maximum grant
$7,200
Lifetime maximum per child
Under 18
Eligibility age (with exceptions)

Unused grants can be carried forward up to $1,000 total balance.

Who Can Contribute:

  • • Parents (most common)
  • • Grandparents
  • • Other relatives or friends (with written consent from plan holder)
  • • Multiple contributors to one RESP increases grant potential

Flexible Beneficiary Options:

  • • Individual RESP: One child, parents have full control
  • • Family RESP: Multiple children, can transfer between siblings
  • • Group RESP: Through education providers (less flexible, more restrictive)

If Child Doesn't Attend Post-Secondary:

  • • Transfer accumulated grant funds to another child's RESP (family plan advantage)
  • • Transfer up to $50,000 of subscription contributions to parent's RRSP (if room available)
  • • Withdraw accumulated income (taxed in subscriber's hands)
  • • Keep plan open for 36 years in case child attends later

Simple Explanation

Easy to Understand

An RESP is a special savings account for your kid's college or university education. Your contributions don't get a tax break going in, but here's the really cool part: the government matches some of your contributions with grant money.

For every dollar you put in (up to $2,500 per year), the government adds 20 cents (up to $500 per year). That's free money just for saving for education—over 18 years, that can add up to thousands in free government grants.

You can open it for a baby and contribute whenever you want until the child is 18. The money grows without taxes. And when your kid goes to university, the money comes out and is taxed in their hands—which is usually way less tax because students earn very little.

If your kid doesn't go to post-secondary? You can move the money to another sibling's RESP, or your own retirement account, or just withdraw it (though you'll pay taxes on the growth).

Best For

  • Parents saving for children's education
  • Grandparents contributing to education
  • Maximizing government grants
  • Long-term education planning

Key Benefits

  • Government matching grants (20%)
  • Tax-deferred growth
  • Low tax on withdrawals (student's rate)
  • Flexible beneficiary options

Ready to Start Your RESP?

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