Earlier is always better, but even a late start in RESPs has benefits.<\/p>\n
\u201cI think they\u2019re a very valuable tool, and the biggest pro of all is that by using them, you get free money,\u201d said Matthew Kempton, portfolio manager at Verecan Capital Management in Halifax. <\/p>\n
\u201cThe government\u2019s going to give you a grant \u2014 a percentage of your contribution \u2014 and there\u2019s even more free money that would come along if you\u2019re a lower-earning household.\u201d<\/p>\n
A Registered Education Savings Plan is a saving tool for education after high school, which includes trade schools and apprenticeship programs, not just college or university. In addition to tuition, the funds can be used for rent, transportation and other expenses. <\/p>\n
The age of 15 for the child is a cut-off point for receiving those government grants if certain minimum contributions haven\u2019t been met yet, Kempton said. But RESPs still have value without the matching grants, he added. <\/p>\n
\u201cYou\u2019re still in a vehicle where dollars are growing tax-free until they\u2019re withdrawn, and there\u2019s value in that,\u201d Kempton said. <\/p>\n
Low-income families are eligible for additional contributions from the government through the Canada Learning Bond.<\/p>\n
Even if you open an RESP later on in your child\u2019s life, he noted contributions can be made for up to 31 years from when it was opened. \u201cAt that point it\u2019s become maybe more of a tax-planning tool versus a \u2018free money\u2019-type vehicle.\u201d<\/p>\n
If a child doesn\u2019t pursue further education or training after high school, the money can be used in other ways, said Kalee Boisvert, a Calgary-based financial and investment advisor for Raymond James.<\/p>\n
\u201cIf they choose not to use it for school, you can keep them open for up to 35 years,\u201d she said. \u201cIt\u2019s growing and being invested; there\u2019s no taxes on any growth and dividends and interest within that RESP\u201d until the money is withdrawn. The government grant and investment gains portion of withdrawals are taxable, but since it is taxed in the hands of students, who are typically low earners at that stage in their life, there\u2019s usually little to no tax owed. <\/p>\n
If the child wants a different career path, such as starting their own business, they can pull that money out, Boisvert said. Government grants would have to be returned to the government if not used for school \u2014 but only the original amount. Any growth on the grant is yours.<\/p>\n
\u201cWhat\u2019s interesting about that is while you\u2019ve had that government grant portion over the years and have been investing it, you\u2019ve likely made money on that grant portion,\u201d Boisvert said. \u201cSo you only have to return the actual grant amount that you received. You don\u2019t have to return any additional growth that was attained from that money \u2014 which is nice.\u201d<\/p>\n
While that growth doesn\u2019t have to be returned, it is taxable, and can receive an additional tax penalty \u2014 but it can also be sheltered from tax by transferring it into an RRSP for the parent, if they have the contribution room, she added. Consult with a financial professional for limits and other details.<\/p>\n
![\"\"](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/09\/JKV6JU5Q4QDYUKYYRBZBFJV5JU.jpg\")
Kalee Boisvert seen in this undated photo, is a Calgary-based financial and investment advisor for Raymond James. THE CANADIAN PRESS\/Handout Kalee Boisvert seen in this undated photo, is a Calgary-based financial and investment advisor for Raymond James. THE CANADIAN PRESS\/Handout <\/p>\n
Savvy investors can see massive growth. In one extreme case, Boisvert said a woman had an RESP for her child that had grown to $400,000. The woman had started early, invested in technology stocks, and the investments took off.<\/p>\n
Despite the taxes that will be owed on that amount of money being withdrawn, \u201cthat\u2019s going to more than pay for school,\u201d Boisvert said. <\/p>\n
\u201cHer daughter\u2019s probably going to get a vehicle out of it as well to be able to drive to school.\u201d<\/p>\n
Boisvert wants parents to consider the investment piece and take bigger swings. Since the savings are for their children, they are emotional and tend to be conservative with investing.<\/p>\n
\u201cBut remember, early on \u2014 we have a long-term timeframe,\u201d Boisvert said. \u201cHow do we invest when you have a long-term timeframe? We want growth here. And as that time frame shortens, we want to start scaling back on the risk.\u201d<\/p>\n
Embark, an education savings and RESP company, manages this on behalf of parents with a \u201cglide path\u201d investment strategy, calling it the Embark Student Plan.<\/p>\n
\u201cThe younger your child is, the more we invest in equities,\u201d said Andrew Lo, CEO of Embark. \u201cAs your child grows older and approaches needing the money to go to post secondary, we automatically rebalance that into a conservative investment so there\u2019s certainty in terms of the amount of money you have ready for tuition and room and board and so on.\u201d<\/p>\n
You can bring other family members into your RESP goals \u2014 cash gifts from grandparents and other relatives can go into these savings, and Lo pointed out that Embark facilitates that with a gifting link. <\/p>\n
Parents should also introduce children to their RESP in middle school \u2014 it gives them confidence, Lo said.<\/p>\n
\u201cTell them, \u2018We\u2019re going to be ready to help you when you\u2019re ready to select your career, your post-secondary courses, and finances will not hinder you from achieving your goals and your dreams,\u2019\u201d Lo said. <\/p>\n
\u201cThat will give the kids a sense that their parents really believe in them, and will get them to start thinking about what kind of careers they want to have.\u201d<\/p>\n
This report by The Canadian Press was first published Sept. 7, 2026.<\/p>\n
Nina Dragicevic, The Canadian Press<\/p>\n
Related Stories<\/p>\n","protected":false},"excerpt":{"rendered":"Earlier is always better, but even a late start in RESPs has benefits. \u201cI think they\u2019re a very…\n","protected":false},"author":2,"featured_media":840216,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,101,526,939,147,530,111,51850],"class_list":["post-840215","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-economy","tag-education","tag-finance","tag-personal-finance","tag-personalfinance","tag-politics","tag-your-money"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/840215","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=840215"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/840215\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/840216"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=840215"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=840215"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=840215"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}