Investments / RESP
RESP: Free Government Money for Your Child’s Education
A Registered Education Savings Plan helps you save for college, university or trade school, and the government adds grants to what you save. We help you set it up, collect every grant and invest it wisely.
The cost of post-secondary education keeps rising. An RESP is the easiest way to get ahead: the government matches 20% of your contributions, your savings grow tax-sheltered, and the growth is taxed in your child’s hands when they study, usually at little or no tax.
RESP at a glance
- 20%Basic Canada Education Savings Grant on the first $2,500 you contribute each year
- $500Maximum basic grant per child each year ($1,000 when catching up a missed year)
- $7,200Lifetime grant limit per child
- $2,000Canada Learning Bond for eligible lower-income families, with no contribution needed
- $50,000Lifetime contribution limit per child
- Age 17Grants are paid until the end of the year the child turns 17
How an RESP works
Open a plan
Choose an individual or family plan and name your child as beneficiary.
Contribute
Save monthly or in lump sums. $2,500 a year collects the full basic grant.
Collect grants
The government adds the CESG, plus the CLB and extra grants if you qualify.
Pay for school
When your child enrols, withdrawals pay for tuition, books, rent and more.
RESP strategies
Start early
Starting at birth gives the grants and growth up to 17 years to compound.
Catch up missed years
You can collect up to $1,000 in grants a year by catching up unused grant room.
Family plans for siblings
A family plan lets brothers and sisters share the savings if one doesn’t go to school.
Grandparents can help
Anyone can open or contribute to an RESP for a child, including grandparents.
Apply for the Canada Learning Bond
Lower-income families can receive up to $2,000 without contributing a dollar.
If your child doesn’t study
Your contributions come back to you, and the growth can move to your RRSP if you have room.
Learn more →Frequently asked questions
What if my child doesn’t go to post-secondary school?
Your contributions are returned to you tax-free. The grants go back to the government, and the growth can be transferred to your RRSP (up to $50,000, if you have room) or taken as income with an extra tax.
What schools qualify?
Universities, colleges, CEGEPs, trade and apprenticeship programs in Canada, and many programs abroad.
Individual or family plan?
An individual plan is for one child and can be opened by anyone. A family plan covers several children related by blood or adoption and lets them share the money.
How is the money taxed when my child withdraws it?
Your original contributions come out tax-free. The grants and growth are taxed as your child’s income, and most students pay little or no tax.
Talk to Devendra Kumar, Financial Planner (CLU, CHS)
DK Insurance & Investment Inc. serves families across the GTA from offices in Vaughan, Mississauga and Brampton. Call or text +1-647-761-0517 for a free, no-obligation conversation.