Registered Education Savings Plan (RESP)

A Registered Education Savings Plan (RESP) is a government-registered, tax-advantaged account designed to help Canadians save for a child’s post-secondary education. Similar in structure to other registered accounts, it offers valuable incentives that encourage long-term education savings.

One of the biggest advantages of an RESP is access to government grants that add to your contributions and accelerate growth. In addition, the investments inside the RESP grow on a tax-deferred basis, meaning earnings are not taxed while they remain in the account. When funds are withdrawn for eligible education expenses, they are typically taxed in the student’s hands, who often has little to no income.Parents, grandparents, and even friends can contribute to an RESP, up to a lifetime maximum of $50,000 per child. Those contributions are invested and have the opportunity to grow over time.

For example, if $10,000 is invested in an RESP for an 8-year-old child and earns an average annual return of 4% over 10 years, the account could grow to approximately $14,802 by the time they begin post-secondary studies. That additional growth can make a meaningful difference in covering tuition, textbooks, and other education-related expenses.