RESP — saving for education
What you'll be able to do
RESP = tax-sheltered education savings with a government grant match, taxed later in the student's low bracket.
- RESP grows tax-sheltered and attracts government grants (e.g., CESG match).
- Capturing the annual grant is a core reason to contribute steadily.
- Growth/grants are taxed in the student's (usually low) hands as EAPs.
A Registered Education Savings Plan (RESP) helps families save for a child's post-secondary education. Contributions aren't deductible, but the account grows tax-sheltered, and — the headline feature — the government adds grants. The Canada Education Savings Grant (CESG) matches a percentage of contributions up to an annual and lifetime maximum, with extra for lower-income families. That match is effectively free growth you can't get elsewhere.
When the child enrols in a qualifying program, the growth and grants are paid out as Educational Assistance Payments (EAPs), taxed in the student's hands — usually at a very low or zero rate. The original contributions come back to the subscriber tax-free. If the child doesn't pursue eligible education, there are rules for transferring or unwinding the plan (and grants may have to be repaid).
For a seller, the RESP story is compelling and easy: 'contribute, capture the government match, let it grow, and it's taxed in the student's low bracket later.' It's also a natural relationship-deepener with family clients.
Key points
- RESP grows tax-sheltered and attracts government grants (e.g., CESG match).
- Capturing the annual grant is a core reason to contribute steadily.
- Growth/grants are taxed in the student's (usually low) hands as EAPs.
- Unused plans have transfer/unwind rules; grants may be repayable.
Examples
A family contributing enough each year to capture the full annual CESG match is effectively earning an immediate, guaranteed boost on those contributions before any market return.
Pitfalls
- Ignoring the annual grant limit and missing matchable contributions.
- Forgetting that grants may have to be repaid if the child doesn't pursue eligible schooling.
Ask your sales coach
In a real Adept rollout this routes to your firm's compliance-approved Claude project; in the demo it opens a fresh Claude chat. Never share real client details.