A Registered Education Savings Plan (RESP) is a special savings account registered with the Canada Revenue Agency (CRA), designed to help families save for their children's post-secondary education.
Contributions made to an RESP grow tax-free until the beneficiary enrols in a qualifying post-secondary program. A lifetime limit of $50,000 per child can be contributed to an RESP. When withdrawing money for educational purposes, any income earned on the contributions is taxed in the hands of the beneficiary, who will typically have little income as a student and will likely pay minimal to no tax on the withdrawal.
To provide your children with even more opportunities, RESPs can be supplemented with the following grants:
|Key people involved in opening an RESP|
|Beneficiary:||The student using the RESP for their post-secondary education.|
|Representative:||The person advising on investment decisions.|
|Subscriber:||The person who opens an RESP on behalf of the beneficiary.|
|Promoter/Provider:||The company that offers the RESP account and the individual investments; also responsible for administration of the plan (e.g. AGF).|
The sooner you start to save, the more your savings grow!