What are RESPs?
RESPs are to education what RRSPs are for retirement. They let you put money aside for your child’s post-secondary education. In this way, you give your child the greatest gift: an opportunity to achieve a dream career.
Advantages
Accrue more thanks to government grants
To encourage education savings, the Government of Canada and some provincial governments add to the amount you contribute to your child’s RESP each year.
Combined with your regular contributions, this generous government aid, which is deposited into your RESP, goes a long way toward growing your savings.
Depending on your family income, you may be entitled to an additional grant. Your contributions, the grants, and the returns grow tax-free until withdrawal.
Federal government
| Grants offered by the federal government | Canada Education Savings Grant (CESG) | Canada Learning Bond (CLB) |
|---|---|---|
| Annual grant (% of contributions) | 20% | Limit of $2,000 per child for eligible families |
| Annual limit (per child) | $500 | |
| Lifetime maximum (per child) | $7,200 | |
| Additional grant (% of contributions) | 10% or 20% of the first $500 invested each year |
Provincial governments
| Grants offered by provincial governments | Quebec Education Savings Incentive (QESI) | Saskatchewan Advantage Grant for Education Savings (SAGES)* | British Columbia Training and Education Savings Grant (BCTESG) |
|---|---|---|---|
| Annual grant (% of contributions) | 10% | 10% | Single payment of $1,200 (Lifetime maximum) |
| Annual limit (per child) | $250 | $250 | |
| Lifetime maximum (per child) | $3,600 | $4,500 | |
| Additional grant (% of contributions) | 10% or 20% of the first $500 invested each year | - |
Recover the money you invest at a pace that suits you
When your child goes on to post-secondary education, you get your money back, and you do not have to pay tax on the amounts you receive.
In the meantime, your child receives the grant money and the returns earned on the entire RESP account in the form of Education Assistance Payments. Since the tax rate is generally lower for students, the amount of tax to be paid on the money received is often minimal.
No loss if your child does not go on to post-secondary education
If your child does not go on to post-secondary education, you can :
- Designate another child in the family
- Withdraw your contributions tax-free
- Transfer your accrued investment income to your RRSP under certain conditions
Opening an RESP 100% online
It is possible to open an RESP account for your child or a loved one in a few clicks in a secure way.
Choosing to invest in an RESP with iA Financial Group means having the guarantee, depending on the kind of investment, that the amounts deposited in the RESP are fully available when the child needs them.
Open an RESP online