An RESP is the ideal financial tool for parents in Quebec and New Brunswick who want to plan for their child’s education while benefiting from some very attractive government incentives.
How they work and the benefits that make them an essential tool for financing a college education.
How to take full advantage of grants to maximize your savings.
Plan for the tax implications so you can optimize withdrawals when your children are in school.
An RESP is a registered savings account designed to help fund your child’s post-secondary education. By contributing to this plan, you will benefit from government assistance and tax advantages—a simple and cost-effective way to grow your savings for your child’s future.
How does it work? Discover the benefits
Government grants are the main benefit of an RESP. By contributing regularly and strategically, you could receive up to $12,8001 from the federal and provincial governments (provincial government grants available in Quebec only), which would significantly boost your investment. Factoring these grants into your savings strategy will help you reach your goal faster.
Explore grants Making the most of your RESP
The tax treatment of RESPs plays an important role, particularly at the time of withdrawal. Careful planning of fund withdrawals minimizes their tax impact for your beneficiary and maximizes the amount of money actually available for their education.
Understanding the tax impact Planning my withdrawals
A Registered Education Savings Plan (RESP) is an account designed to fund a child’s post-secondary education. Participants contribute to the plan and have access to government grants, and their contributions grow tax-free until they are withdrawn.
To get the most out of the grants, it is recommended that you contribute regularly and aim for the $2,500 annual contribution cap that entitles you to federal and Quebec grants—up to a lifetime maximum of $36,000. By tailoring your contribution strategy to the child’s age when the RESP is opened, you can maximize government grants and optimize the growth of your savings.
Withdrawals from an RESP can be made when your beneficiary is enrolled in eligible post-secondary education. You can make these withdrawals directly
from your Client space.
When withdrawals are made, the Educational Assistance Payments—which include grants and income generated—will be taxable to the recipient, while contributions can be recovered tax-free. By planning these withdrawals, you can maximize the amounts actually available for your child’s education.