Registered Education Savings Plans - RESPs

If you are expecting a child, have children, or grandchildren, you may be thinking about saving for their post-secondary education. Tuition rates are rising, and the best way to ensure that your child can afford an education is to start saving early. The financial services industry offers a range of products to help you save for your child's education, but as with any purchase you should shop around.

Registered Education Savings Plans (RESPs) have become a popular way to save since 1998, when the federal government introduced the Canada Education Savings Grant (CESG). The CESG program grants up to $400 per year (lifetime maximum of $7,200 total per child) as an additional RESP contribution for anyone investing in Registered Education Savings Plans (RESPs) for children.

What is an RESP?

An RESP is an education savings plan registered under the Income Tax Act. There are many types available so investigate the risks, costs and cancellation policies. Unlike contributions to a Registered Retirement Savings Plan (RRSP), RESP contributions are not tax-deductible. However, an RESP allows your contributions to grow tax-free.

If you would like more information about the CESG program, Human Resources Development Canada (HRDC) publishes a list of Frequently Asked Questions about the CESG on their website:www.sdc.gc.ca. The Canada Revenue Agency has additonal information on RESPs on their website

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