Grants Available for RBC Direct Investing RESPs

Key Benefits of RESPs

Here are a few key benefits of Registered Education Savings Plans (RESPs).

Canada Education Savings Grant (CESG)

The biggest advantage of contributing to an RESP is the federal government's Canada Education Savings Grant (CESG), which can help your savings grow faster. Here's how it works:

The federal government will automatically contribute 20 per cent of what you put in, up to $500 per year – to a lifetime maximum of $7,200 for each child.
Unused CESG grant amounts are carried forward for future years. Each beneficiary has their own pool, even if contributions are combined in a family RESP.
For a child to receive the CESG at ages 16 and 17, contributions to all RESPs must total at least $2,000 before the year they turn 16; or, contributions must total at least $100 a year in any four years before the year the child turns 16, and cannot have been withdrawn.

The plan subscriber has until the last business day of each calendar year to contribute and qualify for any grants.

Tax-deferred Growth

Investments in an RESP generally grow tax-free.
Tax on the income earned on investments within the plan is deferred until the beneficiary withdraws the funds (and is likely in a lower tax bracket).

Play Catch-Up on Contributions

If you've delayed opening an RESP or haven't contributed enough to get the maximum grant amount each year, you may still be able to take advantage of government grant money.

With the carry-forward option, you can double up on contributions to catch up on missed grant money; however, you can only use one previous year's worth of contribution room each year. Read Playing Catch-Up With RESP Contributions & Grants for more information on carrying forward RESP grants.

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