The basics

Tax-free growth: The money you contribute into an RESP (Registered Education Savings Plan) grows tax-free until withdrawn.

Contribution limit: You can contribute up to a maximum of $50,000 for the duration of the RESP.

CESG maximum: CESG (Canada Education Savings Grant) payments end at $7,200.

Household income and CESG payments

If your annual net family income is more than $77,664: For every dollar you contribute up to $2,000, the federal government will add 20 cents in the form of the CESG. The maximum possible CESG payment each year is $400 to a maximum of $7,200 over the life of the RESP.

If your annual net family income is between $38,832 and $77,664: the federal government will add 30 cents to every dollar for the first $500 you contribute, and 20 cents to every dollar on the next $1500. The maximum possible CESG payment each year is $450 to a maximum of $7,200 over the life of the RESP.

If your annual net family income is less than $38,832: the federal government will add 40 cents to every dollar for the first $500 you contribute, and 20 cents to every dollar on the next $1500. The maximum possible CESG payment each year is $500 to a maximum of $7,200 over the life of the RESP.

Assumptions

You contribute early in the year: You make your contribution at the beginning of the calendar year to gain a year’s worth of extra growth.