You just welcomed a baby and want to start saving early for their future.
Why it fits: Starting early gives you up to 18 years of grants and tax-deferred growth, so even small monthly contributions can add up.
Registered Education Savings Plan (RESP)
Give your child a head start, with free money from the government.
An RESP helps you save for a child's education after high school. The government adds grants to your contributions, and your savings grow tax-deferred until your child uses them for college, university or a trade program.
Overview
A Registered Education Savings Plan, or RESP, is the best way to save for a child’s education after high school in Canada. The biggest reason is simple: the government adds money to your savings.
Through the Canada Education Savings Grant, the government adds 20% to the first $2,500 you contribute each year for each child. That is up to $500 a year and $7,200 per child over their lifetime, plus tax-deferred growth on all of it.
Grants that grow your savings
The government offers two main programs for RESPs:
- Canada Education Savings Grant (CESG): 20% on the first $2,500 contributed each year, with catch-up of up to $1,000 a year for missed years.
- Canada Learning Bond (CLB): up to $2,000 for children from lower-income families, with no contribution needed.
- Provincial programs: some provinces offer their own grants on top of the federal ones.
Choosing what goes inside your RESP
With us, you can fill your RESP with insurance-based options like segregated funds, which offer growth potential with guarantees on your principal, or GICs for predictable, guaranteed returns as your child gets closer to school. We help you shift to safer options as the first day of class gets closer.
How it works
- 1
Open a plan for your child
Choose an individual plan for one child or a family plan for several children related to you by blood or adoption. You will need each child's SIN.
- 2
Contribute and collect grants
The Canada Education Savings Grant (CESG) adds 20% to the first $2,500 you contribute each year, which is up to $500 per child per year.
- 3
Grow your savings tax-deferred
Hold segregated funds, GICs or other insurance-based investments in the RESP. Growth is not taxed while it stays in the plan.
- 4
Pay for school
When your child enrols in a qualifying program, Educational Assistance Payments (EAPs) are paid out and taxed in the student's hands, usually at little or no tax.
Key benefits
Free government grants
The CESG matches 20% of your contributions, up to $500 a year and $7,200 over your child's lifetime.
Catch-up on missed years
If you missed past years, you can catch up and receive up to $1,000 in grants per year by contributing more.
Canada Learning Bond
Children from lower-income families may get up to $2,000 from the government, even if you contribute nothing.
Tax-deferred growth
Your contributions, grants and growth compound without tax until the money is withdrawn for school.
Low tax on withdrawals
Growth and grants are taxed in the student's name, and most students have little income, so they often pay little or no tax.
Family plan flexibility
In a family plan, savings can be shared among siblings, so if one child does not go to school, another can use the money.
Who it’s for
You have three kids of different ages and want one simple way to save for all of them.
Why it fits: A family plan lets you collect grants for each child and share the savings among them based on who needs it.
You want to help your grandchildren pay for school and build a lasting gift.
Why it fits: Grandparents can open an RESP or contribute to an existing one, and every contribution can attract government grants.
Pros & cons
Pros
- Government grants boost your savings by up to 20%
- Tax-deferred growth on contributions, grants and earnings
- Withdrawals for school are usually taxed at a low rate
- Family plans let siblings share savings
Things to consider
- Contributions are not tax-deductible
- Grants must be returned if the money is not used for education
- Growth withdrawn for non-educational purposes is taxed and may face an extra 20% tax
How it compares
| Individual plan compared with a family plan | Individual plan | Family plan |
|---|---|---|
| Number of beneficiaries | One | One or more |
| Who can be a beneficiary | Anyone including yourself | Children or grandchildren related by blood or adoption |
| Sharing savings | Can be transferred to a sibling in some cases | Easily shared among siblings in the plan |
| Government grants | CESG and CLB available | CESG and CLB available for each child |
| Best for | One child or an adult going back to school | Families with more than one child |
Run the numbers
RRSP, TFSA & RESP growthProject your registered savings, tax refunds and government education grants.Frequently asked questions
How much can I contribute to an RESP?
There is no annual limit, but the lifetime limit is $50,000 per beneficiary. To get the most grant money, many families aim to contribute $2,500 per child each year.
What is the Canada Learning Bond?
The Canada Learning Bond (CLB) is extra money from the government for children from lower-income families born in 2004 or later. It can add up to $2,000 to an RESP, and you do not need to contribute to receive it.
What happens if my child does not go to school?
You have options. You can transfer the savings to a sibling, keep the plan open in case they enrol later, or move the growth to your RRSP if you have room. Your contributions are always returned to you, but the grants must be repaid.
How are RESP withdrawals taxed?
Your original contributions come out tax-free. Educational Assistance Payments, which include grants and growth, are taxed as the student's income, and most students pay little or no tax.
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