A Registered Education Savings Plan (RESP) is a government-approved savings account designed to help you save for a child’s post-secondary education. Whether you’re a parent, grandparent, or guardian, contributing to an RESP is a strategic way to invest in your child’s academic future.

What Is an RESP?

An RESP is a special tax-advantaged account that allows your contributions to grow tax-free. While contributions are not tax-deductible, all investment income earned within the plan is tax-sheltered until withdrawn. When the funds are used for education, withdrawals are taxed in the hands of the student—who typically has little or no income and pays little or no tax.

Key Features of an RESP

• Tax-deferred growth: Earnings grow tax-free until withdrawal.

• Government contributions: Boost your savings with grants.

• Flexible investment options: Choose from mutual funds, GICs, stocks, and more.

• Lifetime contribution limit: Up to $50,000 per beneficiary.

• Plan lifespan: RESPs can remain open for up to 35 years, offering long-term flexibility.

Types of RESPs

There are three types of RESPs available:

1. Individual RESP
   Ideal for saving for one child. Anyone can open and contribute, even without a family relationship.

2. Family RESP
   Allows savings for multiple children (must be related by blood or adoption). Contributions can be shared among beneficiaries.

3. Group RESP
   Pooled plans managed by financial institutions. Contributions are grouped with others, and earnings are divided based on plan rules.

Using RESP Funds

When the child is enrolled in an eligible post-secondary program, they can start receiving Educational Assistance Payments (EAPs), which include:

• Investment income

• Government grants

The original contributions can also be withdrawn tax-free by the contributor.

What If the Child Doesn’t Pursue Post-Secondary Education?

RESPs are flexible even if plans change:

• You can transfer the plan to another eligible beneficiary.

• Withdraw your original contributions tax-free.

• Transfer up to $50,000 of investment income to your RRSP (if you have contribution room).

• Unused grants must be returned to the government.

Start Early, Reap More

The earlier you start an RESP, the more you can benefit from compound growth and government grants. It’s a powerful way to reduce the future financial burden of education.

Plan Smart—Secure Their Dreams

An RESP is more than just a savings plan—it’s a commitment to your child’s success. Consult with a financial advisor to determine the best RESP strategy for your family.