RESP

The Registered Education Savings Plan (RESP) is a tax-free account designed to help Canadians save for a child’s post-secondary education.

Contributions are not tax-deductible, but investment growth is tax-sheltered until withdrawn. When funds are used for education, the withdrawals are taxed in the student’s name, often at a low rate. One of the biggest benefits of an RESP is the Canada Education Savings Grant (CESG), where the government matches 20% of annual contributions up to $500 per year, with a lifetime maximum of $7,200 per child.

RESPs can hold a wide range of investments, and funds can be used for university, college, trade school, and other qualifying programs. It’s a powerful tool for parents and guardians looking to reduce the future financial burden of education.