Registered Education Savings Plan (RESP)
Need Insurance Support?
A Registered Education Savings Plan (RESP) is a tax-advantaged savings account in Canada designed to help parents, guardians, and even relatives save money for a child’s post-secondary education. It allows contributions to grow tax-free until the money is withdrawn to pay for education-related expenses.
Why a RESP is Important
1
Encourages Education Savings
It provides a structured and tax-efficient way for families to save for higher education.
2
Government Contributions (Free Money)
The Government of Canada offers incentives such as the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB), which significantly boost savings.
3
Tax Advantages
Investment growth inside the RESP is tax-sheltered until withdrawal. When withdrawn for education, the earnings and grants are taxed in the hands of the student, who usually has a low income and pays little or no tax.
4
Financial Security for Education
Post-secondary education can be expensive. RESP savings help reduce reliance on student loans, allowing students to graduate with less debt.
5
Flexibility
The money can be used for a variety of programs — universities, colleges, trade schools, and certain international institutions.
Key Features of an RESP
Tax-Sheltered Growth
Contributions grow tax-free until withdrawn for education expenses.
Government Grants
CESG: 20% match on contributions (up to $500/year and $7,200 lifetime per child). CLB available for low-income families.
Lifetime Contribution Limit
$50,000 per beneficiary.
Investment Flexibility
Can invest in mutual funds, GICs, stocks, ETFs, bonds, etc.
Beneficiary Options
Can have individual plans (one beneficiary) or family plans (multiple beneficiaries).
Use of Funds
Tuition, books, supplies, transportation, living expenses (while studying full-time).
Carry-Forward Room
Unused CESG room can be carried forward and used in future years.
Withdrawal Rules
Education Assistance Payments (EAPs) are taxable to the student. Contributions can be withdrawn tax-free by the subscriber.
Transferability
Can be transferred to another beneficiary (e.g., sibling) if the original beneficiary doesn’t attend post-secondary school.
Maturity Period
RESP can stay open for up to 35 years.
Frequently Asked Questions
Best Insurance Services
Term Life
Insurance
Term Life Insurance is a type of life insurance policy that provides coverage for a specific period of time
International Student Insurance
International Student Insurance is a health and medical insurance plan designed specifically for students coming to Canada
Travel Insurance
Travel Insurance for Canadians is a type of emergency medical and trip protection coverage designed for Canadian residents
Investment
We’re committed to protecting every Canadian every story, every journey. Investment, Life & Travel we’ve got you covered.
Get an Insurance
Quote to Get Started
- Comprehensive Life Insurance
- Family & Health Protection Plans
- Travel & Visitor Insurance
- Retirement & Investment Solutions
