What is an RESP?
The money accumulated in an RESP is meant to cover tuition fees and all study-related financial expenses, including housing, school supplies, food and transportation fees. The investment income from an RESP accumulates in a tax shelter as long as it’s not withdrawn from the plan.
How to accumulate more?
The federal government has created the Canada Education Savings Grant to encourage parents to invest in their children’s post-secondary education. This grant corresponds to 20% of the annual contributions paid into an RESP, up to $500 per year, per beneficiary. The maximum grant paid per beneficiary cannot exceed $7,200 for life.