Start investing as early as possible. A Registered Education Savings Plan (RESP) is a special savings account to help your family save for your child’s post-secondary education.
Through the Canada Education Savings Grant and the Canada Learning Bond, the Government of Canada matches 20% of your first $2,500 of annual contributions. Based on your household income, you could be eligible for an even higher matching rate – up to 40% of your first $500 matched annually.
RESPs are available through a variety of investment options, including fixed term deposits, variable rate savings accounts.
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If you’re receiving money from the government each month for having children, consider putting it directly into a RESP. Make sure your child has a Social Insurance Numbers before opening an RESP.
- Your RESP can help fund most Canadian post-secondary programs
- No tax charged on income earned with your RESP until the funds are withdrawn
- Beneficiaries 17 or younger receive the Canada Education Savings Grant – equal to 20% of the annual contribution*
- Additional grants are also available for qualifying beneficiaries
|Contribution maximum||Lifetime maximum of $50,000 per beneficiary;
no annual maximum
|Contribution age limit||Final contribution must be made by the end of the 31st year after the year the plan is entered into for all plans, and in addition before a beneficiary's 31st birthday for a family plan|
|Plan age limit||RESP must be collapsed before December 31st of the 35th year following the year the plan is entered into|
|Over-contribution penalty||One percent per month of the over-contribution amount at the end of the month|
|Canada Education Savings Grant (CESG)||20 percent of the annual contribution to an RESP on the first $2,500 contributed each year per beneficiary, untl the end of the year in which the beneficiary turns 17, up to a maximum of $7,200; the CESG does not count towards the $50,000 contribution maximum; note the governemnt has enhanced the CESG for low income families'|
|Refund of contributions||Subscribers can withdrawal their contributions tax-free at any time; however, the plan may have to repay CESG|
Eductational assistance payments (EAPs)
|Generally, $5,000 maximum payout for full-time students with the first 13 weeks of a qualifying eductation program; no limits after 13 weeks; generally, $2,500 maximum payout for part-time students provided certain conditions are met.|