A Registered Education Savings Plan (RESP) is a smart way to maximize education savings. Tax-sheltered investment growth and eligibility for government grants can make a big contribution to your child's future.
The money you contribute to an RESP is sheltered from tax. No income tax is paid on investment returns as long as money remains in the plan. That means investments compound and grow faster than when invested in a non-registered investment.
Through the CESG the federal government matches 20% of your annual RESP contributions, to a maximum of $500 a year and $7,200 over a child's lifetime. Lower-income families may be eligible for additional CESG payments.
Up to $50,000 can be contributed for each RESP beneficiary. Contributions can be through regular periodic payments or lump sum payments. There are no annual contribution restrictions.
Let us show you how.