RESP Calculator

What is the CESG and how does it work?

The Canada Education Savings Grant (CESG) is a government grant that matches 20% of your first $2,500 in annual RESP contributions — giving you $500/year free. The lifetime CESG limit is $7,200 per child. Additional CESG (10% or 20% on the first $500) is available for lower-income families. CESG is paid directly into the RESP account by the government.

What happens if I don't use the RESP for education?

If your child doesn't pursue post-secondary education: CESG grants must be repaid to the government. Your own contributions can be withdrawn tax-free. Investment earnings can be transferred to your RRSP (up to your available room) or withdrawn as AIP (Accumulated Income Payment) — taxed at your marginal rate + 20% penalty. Alternatively, name another eligible beneficiary.

What qualifies as post-secondary education for RESP?

RESP can fund: university and college (full-time or part-time), trade/vocational schools, apprenticeship programs, and even some courses outside Canada. Programs must be at least 3 weeks long (full-time) or 12 months (part-time). The student receives funds as Educational Assistance Payments (EAP) — taxed at the student's rate, usually very low due to basic personal amounts.

When should I start an RESP?

Start as early as possible — ideally at birth. If you open an RESP before the child turns 1 and contribute $2,500/year, by age 18 you'll have earned the full $7,200 in CESG grants. Starting at age 5 instead of birth costs about $2,000 in missed CESG. Opening at birth also allows unused CESG room to carry forward one year.