‎How does an RESP work?

So, you heard about this thing called an RESP and sort of understand what it is, but how do you set one up and where do you take it from there? Fortunately, the process is pretty straightforward and this website (and our RESP experts) are here to help. Let’s take a look at the key parts of the process.

‎

1. Open an RESP

2. Watch your RESP grow

3. Use your RESP

STAGE ONE

‎Open an RESP

Opening an RESP is easy. As long as you and the child each have a Social Insurance Number (S.I.N.), the next steps are simple:

1. Think about a budget

Consider what you can afford for your initial and ongoing contributions (our RESP calculator can come in handy). No matter how much you can afford, or even if you aren’t sure what you can afford, our RESP experts can help create a plan that is right for you and your family.

2. Set up an RESP

Our online application will get you started in about 5 minutes. At the end of this application you will schedule a friendly consultation with an RESP expert to complete the setup process.

START SAVING NOW

STAGE TWO

‎Watch your RESPs grow

It’s not quite magic, but the growth you can experience in an RESP can be quite amazing, especially when starting early. Over the course of your savings journey, you can benefit from government grants, investment gains, and compound growth.

Learn more about :

‎Government RESP grants

The government wants you to save for your child’s education, so it rewards you with free grant money when you save regularly to your RESP. Over the lifetime of your RESP, the government gives you 20 cents on every dollar you save, up to $7,200 per child, or even more in some provinces or income brackets.

As part of our commitment to you, Knowledge First Financial applies for all eligible grants on your behalf, including provincial ones: one less thing for you to think about! Our experts also work with you to maximize RESP grants, so you don’t leave any free money on the table.

Let’s have a look at the types of grants that are available.

Canada Education Savings Grant

The most popular and well-used government grant is the Canada Education Savings Grant (CESG). With the CESG, the Government of Canada provides up to $7,200 per child over the lifetime of your RESP. You will receive 20% of your annual contributions (up to $500 per year) on the first $2,500 you contribute.

In addition, if you are in a modest income bracket, the Additional Canada Education Savings Grant (A-CESG) can add 10-20% more on the first $500 that you contribute each year, up to an extra $100 annually. It’s a great boost to help you reach the maximum $7,200 grant!

Learn more about the CESG

Canada Learning Bond

The Canada Learning Bond (CLB) is a free government grant that helps modest income families save for their children’s education. Through the CLB, the Government of Canada kickstarts your savings with a $500 contribution followed by $100/year until your child reaches 15 years of age (based in part on family net income and number of children). No additional money needs to be added to your child’s RESP to receive the CLB, as long as you’re eligible. Of course, even if you are eligible for the CLB, you are still encouraged to contribute your own savings to capitalize on additional government grants, such as the CESG. If you are in a modest income bracket, you are highly encouraged to apply for the CLB and A-CESG when you open your RESP.

Learn more about the CLB

British Columbia Training and Education Savings Grant

Residents of British Columbia can earn more with the British Columbia Training and Education Savings Grant (BCTESG), a one-time grant that provides parents with an additional $1,200 for each child born after January 1, 2006. No matching or additional contributions are required. You just need to apply for this grant when your child is between the ages of 6 and 9.

Learn more about the BCTESG

Quebec Education Savings Incentive

The Quebec Education Savings Incentive (QESI) is a refundable tax credit program offered by the Government of Quebec. If eligible, you will receive a grant for 10% of your annual RESP contributions – up to $250 per year, with a lifetime maximum of $3,600 per child. Depending on your income, you can earn an extra 5-10% of the first $500 contributed each year.

Learn more about the QESI

What grants can YOU receive?

Find out with the Grant Matching tool

‎Compound growth

‎Your ongoing contributions

STAGE THREE

‎Use your RESP

When the time comes to use your RESP savings for its intended purpose (your child’s post-secondary education) you may wish to withdraw funds from the RESP to pay tuition, room and board, school supplies, and other student expenses.

It pays to know how to withdraw strategically from your RESP, so that you can withdraw funds effortlessly and minimize tax on the income that grew in your RESP over the years. To help you with this process, we have created a dedicated section called Withdrawing from your RESP which dives into all the particulars of the withdrawal process, timing, taxation, and more.

‎Knowledge is power.

Stay in-the-know with the Knowledge First e-Newsletter.

OUR RESP

‎Flex First Plan

Whether you’re starting to save early or late, the Flex First Plan is designed with your family’s success in mind.

Find out more

‎Grandparents and other champions

Discover the role you play

‎How does an RESP work?

‎

STAGE ONE

‎Open an RESP

STAGE TWO

‎Watch your RESPs grow

‎Government RESP grants

Canada Education Savings Grant

Canada Learning Bond

British Columbia Training and Education Savings Grant

Quebec Education Savings Incentive

‎Compound growth

What is compound growth?

Starting early means saving more

‎Your ongoing contributions

Automate your savings

Accelerate your savings

STAGE THREE

‎Use your RESP

‎Knowledge is power.

‎Flex First Plan

‎Grandparents and other champions

‎Further learning

How much to save for education

When to start saving for education

RESP rules

Grant match calculator