The Registered Education Savings Plan (RESP) in Canada is a savings vehicle designed to help subscribers save for a beneficiary’s post-secondary education. Contributions made to an RESP are not tax-deductible, but investment growth within the plan is tax-free until withdrawn.
When the funds are used for educational purposes, they may be supplemented by government grants such as the Canada Education Savings Grant and the Canada Learning Bond, which can significantly boost the savings. It’s a flexible plan that allows family members and friends to contribute towards a child’s future education, providing a structured yet adaptable way to invest in a beneficiary’s academic journey.
The Canada Education Savings Grant (CESG) matches 20% of contributions up to $2,500 per year.
Contributions grow tax-deferred, and students typically pay little to no tax on withdrawals.
Eligible families can receive additional government contributions without the need to contribute themselves.
Funds can be used for various educational expenses, including tuition, books, and living expenses.
Some provinces offer additional incentives to encourage saving for education.
Any adult can open an RESP for a child or themselves, providing a broad scope of potential beneficiaries.