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Saving for Education? Invest in an RESP

Canada’s Registered Education Savings Plan (RESP) provides numerous advantages for families looking to save for their children’s post-secondary education. First and foremost, one of the critical benefits of RESPs is the opportunity for tax-deferred growth. Contributions to an RESP are not tax-deductible, but the investment income earned within the plan is not taxed until the funds are withdrawn for educational purposes. This tax-deferred growth allows the invested money to compound over time, potentially resulting in substantial savings. The person taxed is the beneficiary (i.e. the student), so at a lower tax rate.

Another significant advantage of RESPs is the availability of government grants, such as the Canada Education Savings Grant (CESG). The CESG matches a percentage of the contributions made to an RESP, providing an additional boost to the savings. The Canada Learning Bond (CLB) offers other government contributions for lower-income families, ensuring that even those with limited financial means can benefit from educational savings incentives.


Flexibility in choosing post-secondary institutions and programs is another notable advantage of RESPs. Beneficiaries can use the funds to pursue various types of eligible education, including university programs, college courses, and trade schools. This flexibility allows families to adapt to changing circumstances and better align the savings with the educational needs and aspirations of the beneficiary. My son may use his RESP, if not it will get folded into his RDSP.

In the unfortunate event of the beneficiary not pursuing post-secondary education, there are options to manage the RESP funds effectively. While government grants may need to be returned, the contributed amount can be transferred to the beneficiary’s sibling or the contributor’s Registered Retirement Savings Plan (RRSP), minimizing the financial impact in case educational plans change.

Lastly, the RESP offers family members and friends an opportunity to contribute to a child’s education savings. This collaborative approach allows multiple contributors to pool resources, making it a collective effort to support a child’s educational goals. Overall, the Registered Education Savings Plan is a comprehensive and advantageous tool for Canadian families seeking to invest in their children’s future academic endeavours.

The four RESPs I have contributed to have been successful so far. It has helped pay for a degree in the Arts, Kinesiology, Physics, and Math. It helped with a Teaching Certification and a Chiropractic degree. Three down, one to go.

Back To School

A few other quick views on back-to-school and RESPs

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