The government will give you free money to save for your child's education. Seriously. Up to $7,200 per child in grants alone.
The Registered Education Savings Plan is a tax-sheltered account designed to save for a child's post-secondary education. The real magic is the Canada Education Savings Grant (CESG) — the federal government matches 20% of your contributions, up to $500/year per child. That's a guaranteed 20% return on your money before any investment gains.
Growth inside the RESP is tax-deferred. When withdrawn for education, the grants and growth are taxed in the student's hands — who typically has little or no income, meaning they pay little or no tax.
The government adds 20% on the first $2,500 you contribute each year per child — that's $500/year in free money. Lifetime CESG limit is $7,200 per child. Low-income families may qualify for additional grants.
No annual contribution limit — you can contribute up to $50,000 per child over the life of the plan. But only the first $2,500/year qualifies for the CESG match, so pacing matters.
All investment returns compound tax-free inside the RESP. When withdrawn for education (EAPs), grants and growth are taxed in the student's hands — usually at a very low or zero rate.
Covers tuition, books, housing, and living expenses at any qualifying post-secondary institution (university, college, trade school). Family plans allow you to share funds between siblings.
Start at birth to maximize the 18 years of CESG. $2,500/year = $500 CESG/year. Over 18 years at 7% returns, that turns into roughly $115,000+ for your child's education.
A family RESP lets you share funds between siblings. If one child doesn't pursue post-secondary, the other children can use the full balance. Much more flexible than individual plans.
If you missed previous years, you can catch up. The government allows you to carry forward CESG room and claim up to $1,000 in grants per year (on $5,000 of contributions). Start catching up now.
Your contributions come back to you tax-free (they were never deducted). The CESG goes back to the government. The growth can be transferred to your RRSP (if you have room) or withdrawn with a 20% penalty + tax.
Maximize government grants, catch up on missed CESG years, and build your child's education fund. Free consultation, no obligation.