Raising kids is expensive—and post-secondary education is one of the biggest future costs Canadian parents face. That’s where the Registered Education Savings Plan (RESP) comes in. But how does it work, and why should you start one?

What Is an RESP?

An RESP is a government-registered savings account that helps you save for your child’s post-secondary education. Its biggest perks:

• Tax-sheltered growth
• Government grants (like the CESG)
• Flexibility in investment options

Government Grants Make a Big Difference

The Canada Education Savings Grant (CESG) gives you 20% on the first $2,500 you contribute annually, up to a lifetime max of $7,200 per child. Low-income families may qualify for even more through the Canada Learning Bond (CLB).

How Much Should You Contribute?

There’s no one-size-fits-all answer, but even small contributions can add up, especially when you start early. Consider:

• $2,500/year maximizes the CESG
• Automatic monthly contributions help keep you consistent

What Can the Funds Be Used For?

RESP funds can be used for:

• Tuition
• Books and supplies
• Housing and living expenses (if enrolled full-time)

What Happens If They Don’t Go to School?

You have options:

• Transfer to another child
• Roll up to $50,000 into your RRSP (if you have room)
• Withdraw funds (with some tax and grant repayment)

Bottom line: Starting an RESP early sets your child up for educational success—and reduces your financial stress down the road.