Registered Education Savings Plan: Who Qualifies and What You Get
Learn how to access government grants to help save for a beneficiary's future education costs through this savings plan.
A Registered Education Savings Plan (RESP) is a specialized account designed to help you save money for a beneficiary's future education costs.
Who it's for
This plan is intended for parents or any individuals who want to save money specifically for a beneficiary's future education.
What you get
The main benefit of this plan is the ability to receive government grants, specifically the Canada Education Savings Grant (CESG). These grants are provided by the government to match a portion of the contributions you make into the account.
What it costs you
While the government provides matching grants, there is a limit on how much total money can be placed into the account over time. There is a lifetime contribution limit of $50,000 per beneficiary.
The catch to know
It is important to understand how withdrawals work if education plans change. If the child does not go to school, you are able to withdraw your original contributions tax-free. However, any government grants that were added to the account must be returned.
How to apply
- Open a plan through an eligible financial institution or provider.
- Make contributions into the account to trigger the matching process.
- Confirm that the Canada Education Savings Grant (CESG) is being applied to the account.
- Visit the official portal for more details: https://www.canada.ca/en/services/benefits/education/education-savings/resp.html