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December 16th, 2020

Facts About RESP

(that you may not have known)

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Written by Emily Prum


The majority of people know that if you contribute a minimum of $2,500 to your RESP, you can receive the Canada Education Savings Grant (CESG) annual maximum of $500. Most people only contribute $2,500 just for the CESG, by doing this you’re not getting the maximum benefit out of your RESP.

Facts to Help Maximize your RESP Benefits

Here are a couple of facts about RESP that you should know to make the most out of your account:

  • The maximum you can receive from the CESG is $7000. You can get a bonus $100 a year when you first start (A-CESG), with this the combined lifetime CESG and A-CESG the maximum can receive is $7200


  • You can make a maximum lifetime contribution of $50,000. If you were to only contribute $2,500 each year when your child is born until your child is 14 (the last year that you would get CESG) then you would only be contributing $35,000.


  • RESP can be used for investments. There are two types of RESP investments
    • Fixed-Income Investments: Cash, short-term bonds, and guaranteed investment certificated that you contribute to your accounts, which pay you through a set interest rate. However, the interest rates are usually low and do not have a high return.
    • Equity Investments: Investing in stocks, and equity mutual funds. Investing in equity can be highly beneficial if the company or corporation you invest in goes up in value. This can give you a higher return, but stocks and funds can fluctuate often.
    • It is important to work with a financial advisor to make sure that you choose the best RESP investments.


  • Taxes: The money put into a RESP and the money grown within the account are not taxed. However, when the money is withdrawn by the student, it is considered to by taxable income.


Spiering, “What investments can you hold inside an RESP?,” What Investments Can You Hold Inside An RESP? | Sun Life, 19-Sep-2018. [Online]. Available: [Accessed: 15-Dec-2020].

Burnett-Nichols, “Three important facts about RESPs that Canadians need to know,” The Globe and Mail, 02-Sep-2020. [Online]. Available: [Accessed: 15-Dec-2020].

T. Canada, “What to Claim as Income if You’re a Student,” 2020 TurboTax® Canada Tips, 02-Mar-2020. [Online]. Available: [Accessed: 15-Dec-2020].


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