A Registered Education Savings Plans (RESP) grows tax-free until they start university, college, or trade school. When you contribute to an RESP, the federal government's Canada Education Savings Grant will match 20% of your yearly contributions to a maximum of $500 annually per child.
Whether you're providing for one child or multiple, as a friend or family member, there's an RESP that's right for you. Choose between an Individual Plan or a Family Plan.
With an Individual Plan, only one person can be designated as the RESP beneficiary.
This individual does not have to be related to the subscriber.
With a Family Plan, more than one person can be designated as a beneficiary in the same plan, as long as they are related to the subscriber by a blood or adoption relationship.
A blood or adoption relationship includes: son, daughter, brother, sister, or grandchild.
One advantage of a Family Plan is the flexibility it offers. When you are ready to withdraw funds from the plan, the funds do not have to be shared equally among the beneficiaries.
Human Resources and Social Development Canada (HRSDC) provides an incentive for parents, family, and friends to save for a child's post-secondary education by paying a grant based on the amount contributed to an RESP for the child. This grant is called the Canada Education Savings Grant (CESG).
How the CESG Works
Regardless of your family income, under this program the government pays a basic grant of 20% of annual contributions you make to all eligible RESPs for a qualifying beneficiary under 18 years of age.
This enables each beneficiary to receive up to a maximum of $500 per year (or $1,000 in CESG if there is unused grant room from a previous year), with a lifetime limit of $7,200.
Unused grant room can be carried forward indefinitely.
Depositing CESG Money
The CESG money will be deposited directly into the child's RESP.
Qualifying for the CESG
Beneficiaries qualify for a grant on the contributions made on their behalf up to the end of the calendar year in which they turn 17 years of age.
If the beneficiary does not pursue post-secondary education, the CESG is returned to the government.
Customer Service Support
For additional information regarding the Canada Education Savings Grant, please contact Human Resources and Social Development Canada (HRSDC) at: