RESP
Save for education with grants + tax-sheltered growth.
What it is
A registered account to save for a child’s post-secondary education.
Best for
Parents/guardians who want grants and long-term growth for school.
Watch for
Rules on withdrawals and what happens if school doesn’t happen.
Quick take
- Government grants can boost contributions.
- Investments grow tax-sheltered inside.
- Withdrawals for education are taxed to the student (often low).
- Great long-term education plan when started early.
Key terms
- Subscriber: person who opens/contributes.
- Beneficiary: student who uses the funds.
- CESG: common grant (often 20% on contributions).
- EAP: education payments (growth + grants portion).
Pros
| Topic | Notes |
|---|---|
| Grants | Free money can boost savings. |
| Tax-sheltered growth | No tax while it grows inside the plan. |
| Student taxation | Education withdrawals often taxed at a lower rate. |
| Long runway | Works best over many years. |
Cons
| Topic | Notes |
|---|---|
| Rules/limits | Must follow RESP withdrawal rules. |
| If no school | Some grant money may be returned. |
| Timing matters | Need a plan for withdrawals during school. |
| Admin choices | Pick the right provider and investments/fees. |
Educational content only — not financial advice.