A REGISTERED EDUCATION SAVINGS PLAN
A Registered Education Savings Plan (resp)
A Registered Education Savings Plan is special tax-advantaged savings account for parents who want to save for their child's post-secondary education (after high school). This is the smartest way to save for your child’s future!
A Registered Education Savings Plan just like tax-sheltered RRSP* and TFSA*, allows investments inside the account to grow tax-free, meaning no taxes on capital gains and no income taxes on interest and dividend payments.
The biggest benefit of RESPs is that the government pays you to save for your child by contributing to your child’s RESP through its grant programs—the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB). The government will match 20% on each dollar you put into an RESP, up to an annual limit of $500, and a lifetime maximum of $7,200 per child. All you have to do is open an RESP and contribute the money, and the government will add CESG funds.
Lower-income kids are eligible for even more (Additional) CESG money. Children from low-income families are also eligible to receive money from the Canada Learning Bond, which is basically up to $2,000 that the government can add to a child's RESP.
As long as both the account opener (subscriber) and the beneficiary are Canadian, it doesn’t matter who opens the account. It could be a child’s parent, grandparent, a friend of the family, or any other relative as long as he’s got access to a child’s Social Insurance Number.
A family RESP, however, can be opened only by parents or grandparents of the children and be spent on the education of any child in the family.