RESP Insights

What is an RESP?


An RESP is a Registered Education Savings Plan. It’s a way to help you save money for your child’s post- secondary education.

But more importantly, it’s a way to empower your child: to help ensure that there are no limits on their dreams, no matter how big those dreams might be.

The ABCs of RESPs

Here are a few quick facts about RESPs that every parent or grandparent should know:

  • You can open an RESP for a child or grandchild. The earlier you start an RESP, the better. If your child is a bit older, don’t worry, just getting started can help your child take advantage of government grants. If the child is 15 years or older, conditions apply for collecting grants.
  • You can contribute a maximum of $50,000 per child (beneficiary) over the life of the plan. How much or how often you contribute depends on your specific plan, but generally it’s a good idea to contribute monthly or annually.
  • Your contributions will be matched by the federal government. The Canadian government will match 20% (up to $500 assuming no carryforward room) in a given year as part of the Canada Education Savings Grant (CESG). The lifetime maximum is $7,200 per child (beneficiary).
  • There is no tax deduction for contributions. However, your contributions can be withdrawn tax free.
  • Your child (beneficiary) receives payments from their RESP once they have enrolled in a post-secondary program. These payments are called educational assistance payments (EAPs).
  • Your beneficiary pays taxes on their EAPs. However, because their income is likely low, they will pay little to no tax.
  • Your child has time to pursue their dreams. An RESP can stay open for up to 36 years. This gives your child time to decide on their future. Should they decide not to pursue any post-secondary education, you can transfer the savings to another child or withdraw your contributions tax-free. Conditions apply.

An RESP helps you save for tomorrow, today
It’s difficult to predict just how much tuition will be when your child or grandchild goes to university or other post-secondary education, but
it’s a safe bet it’ll be even higher than it is today. That’s why it’s important to start saving early, as the earlier you start, the more time you have to save.

In addition to the Canada Education Savings Grant (CESG), there are other grants you may be able to take advantage of as well, including the Canada Learning Bond and several provincial educations savings incentives.

What is an RESP? A tool that empowers your child to dream big
Life goes by quickly. Your kids will soon be amazing you with what they’ve achieved. Seemingly overnight, they’re going from crawling to walking, from first day of school to driving test.

You want to make sure you’re giving them every opportunity along the way to spread their wings and fly to whatever destinations await them.

An RESP is a great way to ensure they’ll have that support should their dreams include a post-secondary education.

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