February 16, 2021

What is an RESP? (Video)

Find out what makes RESPs a great way to save for your child’s education.

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What is an RESP?

Simply put, a Registered Education Savings Plan, or RESP, is a savings account to help save for a child's education after high school.

People usually set them up for their kids or grandkids. Once enrolled in an eligible program, the student (known as the beneficiary) receives money in amounts you control.

How much can you contribute to an RESP?

Parents, grandparents, relatives and friends can contribute money any time into an RESP.

There’s no annual contribution limit. But the most you can contribute is up to $50,000 per beneficiary. 

What can an RESP be used for?

An RESP can help a student pay for an eligible university, college or apprenticeship program.

What are the benefits of an RESP?

  • The Canadian government will match 20% of your annual contributions up to $500 per year to a lifetime maximum of $7200. That's more than $7000 in free money. And, depending on where you live in Canada, you may have access to provincial education savings programs as well.
  • RESPs are tax-sheltered savings plans. This means that any investments within the plan grow tax-free until they’re withdrawn.

RESPs are tax-advantaged savings combined with free money in the form of government grants. That's what makes them such a smart savings opportunity for Canadian families.

How much do I need to save for my child's education? 

Every child's situation will be different. But, it's safe to say that tuition, books, technology, transportation, room and board, etc. can add up.

Need help getting started?

A Sun Life Financial advisor can help you select a savings plan that works best for you.

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