Registered Education Savings Plan (RESP)

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UP TO $7500


Last date 26 May, 2023

Who is RESP meant for?

RESP is a great investment opportunity which enables you to save for the postsecondary education of your children. The invested/accumulated funds can be used to pay tuition fee and other financial barriers of post-secondary education including residence, school supplies, food, and travel. Like RRSP, the funds invested in RESP grow in a tax-sheltered manner until the time you withdraw the money to cover educational expenses. It would be better if you start investing early as it will give your investment the maximum time to grow.

Who can open RESP?

Parents, grandparents, maternal uncle, paternal uncle, maternal aunt and friends........anybody can open RESP account for a child, and the same child can be the beneficiary of multiple RESPs.

Who can be the named Beneficiary?

You can name any child as your beneficiary and you don’t need to be related to the child.

After the plan comes into force, you still have the option to change the beneficiary. As per the age of the new beneficiary, you can continue contribution within the duration of the policy.

How much money can you save?

The maximum lifetime contribution limit per child is $50,000 while there isn’t any annual contribution limit. This implies that as per your budget, you can invest up to $50,000 in the plan.

To encourage parents to invest funds in post-secondary education of their children as early as possible, the government of Canada has devised CESG plan.

CESG in a Glimpse:

  • Annual Grant: 20% of your annual contribution
  • Contribution Limit of Annual Grant: $500
  • Total Lifetime Limit per Saving (per Beneficiary): $7,200
  • Some provinces offer their own Grant programs in addition to CESG. The federal and provincial governments contribute the grants directly into the RESP, and these additions within your contribution can significantly increase your savings.

If your child doesn’t want to study further, how can you utilize the funds?

If your child doesn’t wish to continue his post-secondary education, then you can:

  1. Nominate a new beneficiary
  2. Take back/withdraw the principal amount that you contributed, when your child is at least 21 years of age. The remaining grants and bond must be returned to the government.
  3. Transfer the funds into your RRSP account
  4. Donate the funds to an educational institution


RESP is a unique savings tool that enables you to save effectively for your child’s future educational needs. To take full advantage of this opportunity, you need to pay attention to certain aspects as below:

Start investing early

It would be better if you start investing early as it will give your investment the maximum time to grow.

Utilize the available grant funds properly

We are indeed lucky to be in the wonderful nation Canada where the government understands the importance of healthy growth of children, and it generously supports parents in this endeavour by providing them a tax-free Universal child care benefit. Parents can very effectively utilize this financial benefit by investing it in RESP. Along with that, an additional amount of CESG is available for eligible children from middle- and low-income families. You need to utilize these grants for maximum permissible benefit.

Make well- informed decisions about investment- don’t follow the ‘herd behaviour’

Exercise prudence while deciding about the RESP product and company. Instead of simply following the celebrity endorsements or investments recommended by friends; be careful before you choose the investment.

Understand how an investment works

Before you make any decision, it is very important to do a thorough research about available investments as it ensures that you:

  • understand the risks associated with the investment, including the potential losses or returns;
  • consider how it fits in your existing portfolio; and,
  • know the amount of fees/ any penalties for early withdrawal that you will pay

Shop around for an advisor

As a first time investor, we feel inclined to approach the same advisor who is being consulted by our parents, friends or relatives. But here, it is important to understand that the advisor that’s right for someone else may not be right for you. You need to choose the advisor as per your needs, the type of clients he/she works with and how involved you want to be in your investing decisions.

Pay proper attention to fees

You need to understand the fees you pay when you invest as they reduce your return. Before making an investment, ask questions and evaluate the available options. For instance, two investments may carry similar risk and expected return, but one may have higher fees – all else equal, the fees would affect your returns.

Make optimum use of RESP as an investment account

It is a proven fact that among the asset classes, equities provide the highest long-term rate of return. An early investment into an RESP will let your stocks grow for 18 years or more.

Monitor your account statements regularly

To show the activity in your account and provide an update on your investments, your financial institution sends you monthly or quarterly account statements via mail or makes them available online. Examine your statements to confirm:

  • That the investments that you have bought and sold are correct.
  • The fees and commissions charged on the investment are correct.
  • The amount of gain/loss of your investments.

If you find anything unclear/incorrect, contact your financial representative immediately.

Be informed about the ways you can utilize RESP funds

You may use the RESP funds for any reasonable post-secondary education expense of your child in Canada as well as out of country (including apprenticeships). An added advantage is- the capital that you have contributed (not the grants or the money made from the grants) can be used for any purpose as per your need.

It is evident that a wisely decided appropriate amount of investment for your child’s post-secondary education will ensure the growth of funds in the best possible manner, which will be readily available when you need them for the intended purpose.

We are happy to announce that to commemorate the RESP Awareness Campaign

We have organized a free contest on Lohri Festival in which you can win a total cash prize of $5,000. On January 14, 2022, there will be 5 draws with $1000 cash prize for each of the draws. There is a guaranteed prize for expecting mothers and children celebrating their first Lohri. To participate, you don’t need to purchase a plan. Simply go to our website and register your kid’s name in the contest.

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