Earn free tuition money with an RESP

An RESP gets you 20% return on every dollar you save for your kids’ university education—up to $7,200 in federal government grant money per child. Sometimes, the tax man’s OK!



From the April 2015 issue of the magazine.

Creative Commons/John Walker

Creative Commons/John Walker

What would you say if someone offered a 20% return on every dollar you squirrelled away for your kid’s university tuition? Well, setting up a Registered Education Savings Plan lets you do exactly that: with an RESP, the first $36,000 you contribute is eligible for the 20% Canada Education Savings Grant (CESG). Keep in mind the maximum contribution eligible for the grant is $2,500 per year (up until your kid turns 17), and there’s a lifetime maximum of $50,000 per child that can be contributed. Even though your contributions aren’t tax-deductible like RRSP contributions, the investment earnings do accumulate on a tax-deferred basis. Then, when your child starts post-secondary schooling, funds can be withdrawn practically tax-free because RESP investment earnings and government grants will be taxed at your child’s low marginal tax rate. Sometimes, the tax man’s OK!

» How to pay tuition for all your kids

» RESP Calculator

Tax savings: A grant of $7,200 per child, plus lower taxes on any investment growth.


One comment on “Earn free tuition money with an RESP

  1. I am currently going to school to obtain more credits to get into a trade program I am interested in. I would like to get more information about the help for Colleges and Universities as a Low – Income family / students. Is there any limits in terms of age ? Its only for kids ?


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