Registered Education Savings Plan (RESP)

A Registered Education Savings Plan (RESP) is a special savings plan that grows tax-free until you or your child is ready for post-secondary education (university, college or vocational institute). Once enrolled in a post-secondary institution, payments may be withdrawn from the RESP for education-related expenses. Incentive grants are available through the federal government and the Saskatchewan government, making RESP's a popular choice for parents to save for their children's education.

Benefits of an RESP

  • Income earned within the plan is tax-sheltered until withdrawn and is taxable to the student (who pays little or no tax).
  • The Government of Canada offers grants including the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB), matching up to 20% of your annual contributions to a maximum of $500 per year per child ($1,000 in CESG if there is unused grant room from a previous year), lifetime maximum of $7,200.
  • The Government of Saskatchewan offers the Saskatchewan Advantage Grant for Educations Savings (SAGES). They will provide a grant of 10% on contributions made since January 1, 2013 into an RESP to a maximum of $250 per child per year. The maximum lifetime SAGES grant is $4,500 per child.
  • You can choose an individual plan (one beneficiary) or a family plan (multiple beneficiaries).
  • Anyone can contribute to an RESP, making it a nice option for grandparents or relatives who wish to contribute to a child's education.