RESP (Registered Education Savings Plan)
A Registered Education Savings Plan (RESP) is a tax-sheltered account designed to help Canadian families save for a child's post-secondary education. While contributions are not tax-deductible, investment growth is tax-free inside the account. The federal government provides matching grants through the Canada Education Savings Grant (CESG) — 20% of the first $2,500 contributed annually, up to $500 per year and $7,200 over a lifetime. The lifetime contribution limit is $50,000 per beneficiary. When funds are withdrawn for education, the grants and growth (called Educational Assistance Payments) are taxed in the student's hands, typically at a low rate.
Related Terms
CESG (Canada Education Savings Grant)
The Canada Education Savings Grant (CESG) is a federal grant that matches 20% of annual RESP contributions, up to $500 per year on the first $2,500 contributed.
RRSP (Registered Retirement Savings Plan)
An RRSP is a government-registered account where contributions are tax-deductible and investments grow tax-free until withdrawal.
TFSA (Tax-Free Savings Account)
A TFSA allows Canadian residents aged 18 and older to invest money and withdraw it at any time without paying tax on the growth.
FHSA (First Home Savings Account)
The FHSA is a registered savings account introduced in 2023 that combines the best features of an RRSP and TFSA for first-time home buyers.