What is an RESP?
An RESP is a powerful way to save for your child's or grandchild's post-secondary education. Parents, grandparents and friends can contribute money any time to an RESP – up to a lifetime total of $50,000 per child. These contributions are not tax deductible, but any investment income that’s earned within the plan isn’t taxed until it's withdrawn.
In addition to tax-deferred growth, the federal government will also automatically contribute a Canada Education Savings Grant (CESG) of 20% of what you put in, up to $500 per year – to a lifetime maximum of $7,200 for each child. If your family income is low, you can receive an even higher amount. For details on these and other grants you may be eligible for, visit CESG.
You should consider an RESP if:
- You want to make sure that an important child in your life has the opportunity to get a post-secondary education.
- You want your child/children/grandchildren to have the benefits of the Canada Education Savings Grant program.
- You think it’s a good idea to set up a tax-efficient account where relatives or family friends can recognize a child’s special occasions (birthdays, etc.) by contributing directly to his/her post-secondary education.
Types of RESPs available:
Family RESP plans
- You (the planholder) can name 1 or more children as beneficiaries (the person/people you’re saving the money for), but they must be related to you.
- Beneficiaries must be siblings of one another to receive the CESG.
- Children, grandchildren, adopted children and stepchildren are fully eligible.
- If the eldest child doesn't go to post-secondary school, under certain circumstances you can transfer the grant money to other beneficiaries.
- You don't have to split payments evenly among children.
Individual RESP plans
Anyone can open these plans – you (the planholder) don't have to be the parent or even a close relative of the person you’re saving for (the beneficiary). There are no age limits, so you can even set up an RESP for yourself or another adult.
In both types of RESP, the planholder fully controls:
- How the money is invested
- When, how much and how often the beneficiary gets payments.
For more information, please visit Canada Revenue Agency’s RESP page.
RESP grants and contributions
Understand the rules for contributing to an RESP, and find out about the government grants and bonds that can help you build your RESP savings.
How much do I need to save for my child’s education?
Tuition, books, technology, transportation, room and board -- education expenses can add up. Estimate how much it will cost to send your child to school with our RESP calculator.
Give a child you love a head start on higher education
Whether they’re still in diapers or in those awkward tween years, our kids deserve the best we can give them – including help with their post-secondary education. A Sun Life advisor can show you how an RESP can help you save for university, college or an apprenticeship – and how you can add to your savings with free money from the government.
Talk to your advisor or find an advisor near you to get your savings started.