Registered Educational Savings Plans (RESPs) help save money for a child's higher education.

Basics

• can make deposits up to $4,000 per child per year
  • maximum of $42,000 per child
• 20% Canada Educational Savings Grant (CESG) on first $2,000 each year

Advantages

• tax-free investment growth
• tax on growth deferred until income withdrawn (then taxed at the marginal tax rate)
• tax-free switches (no deemed disposition)
• tax-free transfer the spouse upon death, if spouse is the beneficiary