RESP is an investment option available to parents and caregivers to save for their children’s education for post-secondary schooling. The primary advantages of RESPs are the access they enable to the Canada Education Savings Grant (CESG) given by Govt of Canada, and as a method to generate tax-deferred income.
Canada Education Savings Grant (CESG) and Additional Canada Education Savings Grant (A-CESG) is a grant given to parents who are saving for their children’s post-secondary education via RESP’s.
Average and lower-income families can receive more CESG sooner—30% to 40% on the first $500 contributed each year. Grants on annual contributions between $500 and $2,500 are matched at the rate of 20% as described above. Combined CESG and ACESG lifetime grant maximum of $7,200 per child.
RESPs can be used for some and all tuition fee and any other post-secondary education expense for the beneficiary as long as they have the proof of registration in a post-secondary program in the listed institution. As an example, if all the conditions are met, you can pay for a car including maintenance and insurance for the child who is beneficiary to that RESP.
Questions are answered in detail here on the Canada Website.
