A Registered Education Savings Plan, or RESP, is a special savings plan to help you save for a child’s post-secondary education. With the rising costs associated with sending a child to college or university, an RESP can really help because the government provides grants while the savings grow tax-deferred until withdrawn. When the student withdraws the funds for educational purposes, the withdrawals are taxed in the student’s hands, typically at a lower rate.
To encourage saving for higher education, the federal and provincial government offers grant and tax incentive programs - without impacting your contribution room.
Learn the different grant programs.
You can contribute up to $50,0001 per child and there are no taxes payable on the money earned in an RESP until it's withdrawn. When RESP grants and earnings are withdrawn by the child for educational purposes, they are taxed at the student's generally low tax rate.
See how much you could save with the Education Savings Tool
All a child needs to become the beneficiary of an RESP is a Social Insurance Number (SIN). Look at how much more can be saved for a child's education by starting a savings plan sooner.
• 6% rate of return compounded annually until child is 18 years old
Take a look at the RESP options available to you.
An RESP is a good investment option if you’re looking to save for educational purposes in the:
A TD Registered Education Savings Plan (RESP) can help make saving for a child's education easier. With a wide range of investment options available, including Individual Beneficiary and Family Beneficiary plans, you’re sure to find a TD RESP that’s right for you.
A Registered Education Savings Plan, or RESP, is a special savings plan that lets savings grow tax-deferred until a child is ready for college or university. It’s also a great place to purchase GICs and Term Deposits because the earnings are not taxed until withdrawn, generally at a student's lower tax rate.The highlights:
A Registered Education Savings Plan (RESP) is a great place to purchase investments like mutual funds because you don't pay any tax on the income you earn on your investment until the money is withdrawn for educational purposes.The highlights:
A TD Waterhouse RESP puts the power of saving your money in your hands.The highlights:
The Government of Canada encourages saving for a child's education after high school by making contributions to a child’s RESP with grants – that’s even more money to grow your savings!
The basic Canada Education Savings Grant (CESG)1,2,3 will top up your annual contribution by 20%, up to $500 per beneficiary each year to a lifetime limit of $7,200. Additional CESG grants may be available, depending on your income.
|Summary of basic and additional CESG|
|Family net income*||CESG rate on first $500 (or less) in contributions per year||CESG rate on contributions between $500 and $2,500 per year|
|$41,544 or less||20% basic + 20% additional||20% basic|
|$41,545 - $83,088||20% basic + 10% additional||20% basic|
|More than $83,088||20% basic||20% basic|
For example, if your net family income is $60,000, and you contribute $2,000 in a year, the government CESG contributes an additional $450 to the child’s RESP.
This grant is available to children born on or after January 1, 2004, whose families are eligible to receive the National Child Benefit Supplement. The Canada Learning Bond (CLB) can add up to $2,000 to your RESP per child.
The Alberta Centennial Education Savings Grant can add up to $800 to an RESP for every child born to or adopted by Alberta residents, subject to qualifications.
The Québec Education Savings Incentive (QESI) is an annual refundable tax credit from the provincial government available to eligible RESP beneficiaries who reside in Québec.
We’ve provided answers to some of the most common questions people have about RESPs. Take a look below to find helpful information.
Conditions apply to all of these options, so please ask us for details.
Yes, a transfer between RESPs can be made under certain conditions. Please ask us for details.
Your child does not have to attend college or university right after high school; however, an RESP must be terminated in the 35th year following the year in which the plan was established.
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Here are some terms you might come across when you're learning about RESPs.Subscriber
The person who opens and contributes to an RESP for a beneficiary.Joint Subscriber
A co-contributor to an RESP set up by a subscriber. This individual must be the spouse or common-law partner of the subscriber.Beneficiary
The person who has been designated to receive the benefit of the RESP. It is important to note that to receive the Canada Education Savings Grant (CESG), the beneficiary must be a resident of Canada and must have a Social Insurance Number.Contributions
The money that is deposited into the RESP by the subscriber.Family Beneficiary Plan
An RESP with more than one child as beneficiary, but the children must be related to the subscriber by birth or adoption.Individual Beneficiary Plan
An RESP for one child and the subscriber can be anyone (friends and family).National Child Benefit Supplement (NCBS)
Provides support to low-income families with children. It’s a component of the Canada Child Tax Benefit (CCTB) that’s administered by the Canada Revenue Agency (CRA).