Investing
Registered Education Savings Plan
RESP: Registered Education Savings Plan
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or university, an RESP can really help because the government provides grants while the savings grow tax-deferred until withdrawn.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.
What are the benefits of RESPs?
1. Government grants helps the savings grow
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.
2. Tax-deferred growth
You can contribute up to $50,0001 per child and there are no taxes payable on the money earned in an RESP until it's withdrawn. When RESP grants and earnings are withdrawn by the child for educational purposes, they are taxed at the student's generally low tax rate.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
3. The sooner you start, the more you save
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.
Assumptions
• 6% rate of return compounded annually until child is 18 years old
TD RESPs
Take a look at the RESP options available to you.
Find out more
Start an RESP today
- Visit any TD Canada Trust Branch
- Or call 1-866-222-3456 to discuss your options
An RESP is a good investment option if you’re looking to save for educational purposes in the:
Education Savings Tool
Find out how much can be saved for a child’s college or university costs with the Education Savings Tool.
Find out
TD makes it easy to save
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.
What types of RESPs are available?
- TD Guaranteed Investment Certificates (GICs)
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:
- Your principal (initial investment) is fully protected
- Choose from fixed rates or Market-Growth GICs1
- A full range of terms, features and competitive rates with investment flexibility
- Plus, the RESP has no fees
Start an RESP today
- Visit any TD Canada Trust Branch
- Or call 1-866-222-3456 to discuss your options
1 With Market Growth GICs, your return is based upon the change, if any, in the stated underlying stock market index or indices over the term of the GIC. - TD Mutual Funds RESP
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:
- Gain access to a wide range of investments that would otherwise be difficult and time-consuming to purchase and manage individually
- Actively managed mutual funds give you the benefit of professional investment management
- You have the option to choose TD Comfort Portfolios for a convenient all-in-one investment solution managed by our professional portfolio managers.
Important Mutual Funds Information
Start an RESP today
- Visit any TD Canada Trust Branch
- Or call 1-866-222-3456 to discuss your options
- TD Waterhouse RESP1
A TD Waterhouse RESP puts the power of saving your money in your hands.
The highlights:
- Self-directed account options
- Flexibility to hold a range of investments in one account
Start an RESP today
- Visit any TD Canada Trust Branch
- Or call 1-866-222-3456 to discuss your options
1Refer to the TD Securities Inc. Self-Directed Education Savings Plan.
Education Savings Tool
Find out how much can be saved for a child's college or university costs with the Education Savings Tool.
Find out
Report on Education Costs
Here is a study exploring how much a university degree will cost in about 15 years.
Download report
Government grants help savings grow
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!
Canada Education Savings Grant (CESG)
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.
The Canada Learning Bond (CLB)2
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.
Provincial Grants2,3
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.
Start an RESP today
- Visit any TD Canada Trust Branch
- Or call 1-866-222-3456 to discuss your options
2 The TD Canada Trust Education Savings Plan supports only the Alberta Centennial Education Savings Grant and not any other provincial government RESP grants or tax incentives.
3 The TD Mutual Funds Education Savings Plan supports only the basic Canada Education Savings Grant and not any other provincial or federal government RESP grants or tax incentives.
Education Savings Tool
Find out how much can be saved for a child’s college or university costs with the Education Savings Tool.
Find out
Have a few questions?
We’ve provided answers to some of the most common questions people have about RESPs. Take a look below to find helpful information.
FAQs:
- 1. What happens if the beneficiary decides not to pursue a post-secondary education or I need to withdraw the money?
You have a number of options, including -
- transfer the RESP assets to another eligible beneficiary
- withdraw the funds for yourself (you must repay the government grants and pay taxes and a surcharge on investment income you withdraw)
- transfer up to $50,000 of the investment income to the subscriber's regular or spousal Retirement Savings Plan (RSP)if there is enough contribution room
- donate the investment income to a Canadian educational institution
Conditions apply to all of these options, so please ask us for details.
- 2. Can I transfer funds between RESPs?
Yes, a transfer between RESPs can be made under certain conditions. Please ask us for details.
- 3. How long does my child have to decide whether or not to pursue a post-secondary education?
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.
- 4. How do I withdraw from my RESP?
Visit a branch and speak to one of our Financial Advisor.
RESP Glossary
Here are some terms you might come across when you're learning about RESPs.
SubscriberThe person who opens and contributes to an RESP for a beneficiary.
Joint SubscriberA co-contributor to an RESP set up by a subscriber. This individual must be the spouse or common-law partner of the subscriber.
BeneficiaryThe 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.
ContributionsThe money that is deposited into the RESP by the subscriber.
Family Beneficiary PlanAn RESP with more than one child as beneficiary, but the children must be related to the subscriber by birth or adoption.
Individual Beneficiary PlanAn 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).
