Providing for the future of a minor with an RESP

You can save for the future of your child with a Registered Education Savings Plans (RESPs). RESPs allow Canadians to save for their children’s education by making contributions to a tax-sheltered account. As long as the income earned on contributions remains in the RESP, it is not taxable.

When you contribute to an RESP, you become eligible for government grants like the Canada Education Savings Grant (CESG). Grants like the CESG help to incentivize contributing to an RESP by matching 20% of your annual contributions (up to $500) for each beneficiary. Depending on your net family income, you may be entitled to receive an additional CESG amount.

If you have more than one child, we recommend setting up a family plan. With a family plan, if one of your children decides not to attend college or university, the funds can still be used to finance another of your children’s education.

Note: The maximum lifetime amount you can receive from a Canada Education Savings Grant for each beneficiary is $7,200.

Be aware that contributions you make to an RESP (as a subscriber) cannot be deducted from the income you are reporting on your income tax return.

The contributions and any income earned on the contributions is paid to your child (beneficiary). The income that is earned from the contributed amounts is paid in the form of educational assistance payments (EAPs). Beneficiaries must report the EAPs as income in the year they receive them however they will not have to include the contributions they receive as part of their income.


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