In Canada a registered education savings plan (RESP) is an investment account available to save for post-secondary education. One of the biggest advantages of RESPs are the access they provide to free money from the government including the Canada Learning Bond and the Canada Education Savings Grant. It is also a method of generating tax-deferred income.
The government wants you to save for your child’s education. For income eligible families, the Canada Learning Bond can provide up to $2,000 for each child. If additional money is added to the child’s RESP, the government will also give you at least 20 cents on every dollar put into the account, so it rewards you with free grant money you contribute to the RESP. Depending on how much is contributed to the RESP, the government could contribute up to $7,200 per child. This amount could be higher depending on the income bracket. Click here for more details.
To maximize the RESP you should ensure that your RESP provider applies for all eligible grants on your behalf, so you don’t miss out on any free money.
