Registered Education Savings Plan

RESP

Open a RESP, receive extra 15% education bonus and max $9200 of Government Grants.

A Registered Education Savings Plan (RESP) is a flexible and convenient way to save for a child’s future Post-Secondary education. Government grants are available to qualified Student Beneficiaries to help RESP savings grow. Investment growth earned in a RESP is tax-sheltered as long as it remains in the plan.

To be able to get your child a cover under RESP, a beneficiary must meet the following requirements:

  • Be a Resident or Citizen of Canada

  • And must have a valid Social insurance number (SIN)

Types of RESP Plans:

Individual Plan:

An Individual plan has a single beneficiary, anyone can open the plan and contribute to it. You can contribute to the end of the 31st year (35th year for a Specified Plan) after the RESP inception date. Not limited by the age of the student beneficiary. 

Contribution Limits:

Family Plan:

A family plan can have more than one beneficiary and each beneficiary must be related to subscriber by blood or adoption. Can contribute to the earlier of the end of the 31st year after the RESP Inception Date and the date the Student Beneficiary turns age 31.

For Individual and Family Plans, no annual contribution limit, but subject to a maximum of $50,000 lifetime contribution limit per Student Beneficiary.

Government Grants available:

Canada education savings grant (CESG):

Maximum CESG lifetime limit per student beneficiary is $7,200. 20% of the first $2,500 contributed per year and maximum per year is $500 (carry-forward of grant room can allow up to $1,000 per year).  To receive grant, contributions to plan must be made before December 31st of the year in which the student beneficiary turns 17 years of age.

Student beneficiaries who are turning 16 or 17 in the current calendar year are eligible for the CESG, provided they meet one of the following conditions: 

a) A minimum of $2,000 of contributions was made, and not withdrawn from the RESP, on behalf of the student beneficiary before the end of the calendar year in which he or she turned 15 years of age 

b) A minimum of $100 in annual contributions was made, and not withdrawn from the RESP, in any four years before the end of the calendar year in which the student beneficiary turned 15 years of age.

Canada learning bond (CLB):

Throwing Caps

An additional incentive of up to $2,000 for student beneficiaries born after December 31, 2003 is paid to low-income subscribers. $500 initial deposit with an additional $100 per year until the student beneficiary reaches age 15.

Withdrawals:

A RESP beneficiary receives withdrawals from the plan as Education Assistance Payments (EAP), only when a student is enrolled in a qualifying education program. When withdrawn, plan earned income and government grants can be taxed at the student’s tax rate (he or she could pay little or no tax on this money).

As an advisor, we can guide you to set up a suitable RESP plan to meet your child’s future education goals. Make the best use of Child Tax Benefit by contributing it toward your child’s RESP plan.

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