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RESP: The Ultimate Guide to Registered Education Savings Plans

Every parent wants their child to succeed, but with the cost of post-secondary education rising every year, it can be challenging to save enough money to cover those expenses. You have probably already heard about Registered Education Savings Plans (RESPs), a tax-sheltered savings plan that can help you save for your child's post-secondary education. But what exactly are RESPs, and how can you make the most of them? In this post, we'll explore everything you need to know about RESPs, including the pros and cons, important information, and tips for getting the most out of your savings.

What is an RESP?

An RESP is a special savings account designed to help Canadian families save for their children's post-secondary education. Contributions to an RESP grow tax-free until they are withdrawn to pay for qualified education expenses. The government also offers various grants and incentives to help boost your savings.

Pros and Cons of RESPs


  • Tax-sheltered growth: Your contributions and investment earnings grow tax-free until withdrawal.

  • Government incentives: You can receive various grants and incentives from the government to help boost your savings.

Flexibility: You can choose from a variety of investment options and make contributions at your own pace.

  • Transferability: If your child decides not to pursue post-secondary education, you can transfer the funds to another eligible beneficiary or withdraw the contributions tax-free.


  • Withdrawal restrictions: RESP funds can only be used for qualified education expenses, and there are limits to how much you can withdraw each year.

  • Eligibility requirements: To receive government grants and incentives, you must meet certain eligibility requirements, and there are limits to how much you can contribute.

  • Investment risk: The value of your RESP can fluctuate based on the performance of your chosen investments.

Important Information About RESPs

There are several key things to keep in mind when setting up an RESP:

Eligibility: To be eligible for an RESP, your child must have a Social Insurance Number (SIN).

  • Contributions: There is a lifetime contribution limit of $50,000 per beneficiary, and you can contribute up to $2,500 per year to receive the maximum government grant.

  • Grants and incentives: The government offers several grants and incentives to help boost your savings, including the Canada Education Savings Grant (CESG), the Additional CESG, and the Canada Learning Bond (CLB).

  • Withdrawals: When it's time to withdraw funds from your RESP, you can choose from several options, including educational assistance payments (EAPs) and refundable payments.

Tips for Getting the Most Out of Your RESP

To make the most of your RESP, consider these tips:

  • Start early: The earlier you start saving, the more time your investments have to grow.

  • Maximize your contributions: Contribute as much as you can to take advantage of the maximum government grant.

  • Choose your investments wisely: Consider your risk tolerance and investment goals when choosing your investments.

  • Keep track of your withdrawals: Make sure you're only withdrawing funds for qualified education expenses to avoid penalties and taxes.

An RESP is an excellent way to save for your child's post-secondary education, and with government incentives and tax-sheltered growth, it's a smart financial decision for many Canadian families to utilize.

XO Samantha

Creator, The Budget Book

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