RESP Contribution Calculator

Maximizing RESP Grants: CESG and CLB

The Registered Education Savings Plan is one of Canada’s most generous savings vehicles because of the government matching through the Canada Education Savings Grant (CESG). The basic CESG matches 20% of annual contributions up to $2,500, providing $500 per year in free government grants per beneficiary. The lifetime CESG maximum is $7,200 per child. Contributing exactly $2,500 per year from birth to age 14 captures the full $7,200. If you missed early years, you can catch up: CESG room carries forward, and the government will match up to $1,000 per year (on a $5,000 contribution) to recover unused grants from previous years.

Lower-income families may also qualify for the Additional CESG, which boosts the match rate to 30% or 40% on the first $500 of contributions, depending on net family income. The Canada Learning Bond (CLB) provides $500 in the first eligible year and $100 per year thereafter (up to $2,000 lifetime) to children from families receiving the Canada Child Benefit, with no personal contribution required. The RESP lifetime contribution limit is $50,000 per beneficiary, with no annual cap—though CESG is only paid on the first $2,500 (or $5,000 in catch-up years).

RESP Grant Summary

RESP withdrawals for educational purposes consist of two components: contributions (returned tax-free since they were not deducted) and accumulated income payments (grants plus investment growth, taxed in the student’s hands). Since most full-time students have little other income, the effective tax on withdrawals is often minimal. If the child does not pursue post-secondary education, RESP funds can be transferred to another beneficiary, rolled into the subscriber’s RRSP (up to available room), or withdrawn with a 20% penalty on the accumulated income portion plus regular tax.