A Registered Education Savings Plan (RESP) is a tax-sheltered investment account designed to help Canadians save for a child’s post-secondary education. Contributions to the Plan can be made by parents, grandparents or other adults.
RESPs were introduced in 1972. Since then, the Canadian government has enhanced the RESP program by adding additional grants and increasing flexibility in the program.
Once a RESP is set up for a child, most contribution to the plan are eligible for government grants. The Canada Learning Bond is available for children in Canadian families with eligible income. There are additional grants available from the Canadian government. Quebec and British Columbia also have provincial grants.
Investment income earned in the plan is tax-deferred until it is withdrawn for the child’s education expenses.
There are different types of RESPs – Individual, Family and Group. Each class of RESP has different rules, so it is best to check with a financial planner regarding which type of RESP is best for your situation.
