RESP: Investing in Your Child’s Future

A Registered Education Savings Plan (RESP) is a specialized savings account designed to help you invest in your child’s future education. With the escalating costs of post-secondary education, planning ahead can significantly reduce the financial burden on families. One of the greatest advantages of an RESP is that the government contributes to your savings through grants, which means your contributions grow even faster. In addition to these grants, the income earned within the RESP is tax-sheltered, allowing the investment to grow more efficiently over time. Whether you’re saving for university, college, or a trade school, an RESP provides flexibility and the opportunity to maximize your contributions, ensuring your child is financially prepared when it’s time to pursue their academic goals.

If you have more than one child, a family RESP plan allows you to include multiple beneficiaries under a single account, making it easier to manage your savings. The funds can be allocated to any child within the family plan, offering greater flexibility in supporting each child’s unique educational path. This ensures that if one child doesn’t pursue post-secondary education, the funds can be used for another, maximizing the benefit of your contributions and grants. Family plans are an ideal option for parents or guardians who want to save for the educational futures of all their children in a single, convenient account.

The Purpose and Benefits of an RESP

• Government Contributions: By opening an RESP, you can receive contributions from both the federal and provincial governments, making your savings grow even faster. The Canada Education Savings Grant (CESG) matches 20% of your annual contributions, up to $500 per year, with a lifetime maximum of $7,200 per child. There’s no downside to opening an RESP—even small contributions can attract government support.
• Tax-Sheltered Growth: The funds in an RESP grow tax-free, allowing your savings and any government grants to compound over time. This means more money for your child's education when they need it.
• Flexibility: Contributions to an RESP can be made by anyone—parents, grandparents, or friends—and the funds can be used for a wide range of post-secondary education programs in Canada and abroad.