Are you leaving free money on the table for your child’s education? If you don’t have a registered education savings plan (RESP) in place, there’s a good chance you are. Contributing to an RESP opens the door to government incentives like the Canada Education Savings Grant (CESG), which can add up to $7,200 per child over time. That amount can meaningfully reduce the cost of post-secondary education, yet many families don’t take advantage of these benefits. Statistics Canada reported that in 2019 only about half of families with children under 18 had an RESP.
Why open an RESP? Grants and tax-sheltered growth
The RESP was created decades ago to help Canadian families save for post-secondary education. One of its core advantages is tax-sheltered growth: investment earnings inside an RESP aren’t taxed as they accumulate. You can hold up to $50,000 per child in an RESP, and the account can remain open for many years, giving long-term compounding potential.
Beyond tax-deferred growth, the government added grant programs to make saving in an RESP even more attractive. These grants can significantly increase the total education savings without requiring equivalent additional personal contributions.
RESP grants
- Canada Education Savings Grant (CESG): The CESG matches a portion of your RESP contributions. The Basic CESG provides a 20% match on contributions up to a yearly limit, which translates to a maximum government contribution of $500 per year if you contribute $2,500. Families with lower adjusted income may qualify for additional CESG amounts on the first portion of contributions. The CESG’s lifetime maximum per child, including any additional amounts, is $7,200.
- Canada Learning Bond (CLB): The CLB supports families with modest incomes by providing a grant without requiring a personal RESP contribution. Eligible children born in 2004 or later could receive an initial payment in the first year of eligibility, followed by smaller annual payments until age 15 if the family continues to meet the income criteria. The CLB’s lifetime limit is $2,000 per child, and eligibility can be claimed retroactively in many cases up to the day before the child turns 21.
- British Columbia Training and Education Savings Grant (BCTESG): Available to residents of British Columbia, this one-time grant can add a supplementary sum to an RESP for qualifying children. Applications must be made within a specific age window.
- Quebec Education Savings Incentive (QESI): Quebec residents may receive a provincial incentive that matches a percentage of annual RESP contributions, up to an annual cap and with a defined lifetime maximum.
Use an RESP calculator
Because government grants and compound growth interact in helpful ways, an RESP can be a powerful way to build a college or university fund. Using an RESP calculator lets you model different scenarios—starting age, initial deposit, ongoing contributions and expected returns—to see how grants and investment growth change the outcome. Running a few scenarios helps you set realistic contribution goals and understand how close your savings might come to covering tuition and other education costs.
How to open an RESP account
To begin saving and claim available grants, open an RESP with a financial institution or other RESP promoter. You can choose an individual plan (for one beneficiary) or a family plan that covers multiple children. When selecting a provider, consider how they manage investments, whether they offer automatic contributions, and how they help you claim government grants.
Some providers offer managed RESP solutions that adjust the investment mix as a child nears post-secondary school, moving from growth-oriented investments toward more conservative options to protect capital as funds are needed. These “glide path” approaches aim to balance growth and risk based on the beneficiary’s timeline.
More about RESPs:
- What is the RESP contribution deadline?
- The top 5 questions about RESPs
- Reducing risk in an RESP: How to invest as your kid approaches college or university
- What can an RESP be used for?
- How much money does the government contribute to an RESP?
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