Breaking the Myths About RESP in Canada: Don’t Miss Out on Free Government Grants

Many Canadian parents hesitate when they hear about the RESP (Registered Education Savings Plan), due to common misconceptions like:
❌ “It’s heavily taxed”
❌ “I’ll lose money if my child doesn’t go to university”
❌ “It’s only for wealthy families”

But here’s the truth: RESP is one of the most effective financial tools for saving your child’s education costs — offering thousands of dollars in free grants from the government with minimal tax impact, if used correctly.

Myth #1: RESP withdrawals are heavily taxed

The truth:

• Your contributions are returned to you completely tax-free

• Only the grant money and investment growth (CESG & gains) are taxable — under your child’s name

Why is this good?

• Most students have little to no income, which means:
  

  • They fall into the lowest tax bracket, or

  • Pay zero taxes when withdrawing for education

👉 RESP doesn’t tax you — it lightly taxes the student, and usually has no significant impact on the total amount received.

Myth #2: RESP can only be used for university

The truth:

RESP can be used for various post-secondary education options, including:

• Universities and colleges

• Trade schools and technical training

• Certified programs in Canada and abroad

👉 As long as the program is recognized by CRA, your child can use RESP funds flexibly to pursue a wide range of career paths.

Myth #3: I’ll lose all the money if my child doesn’t continue school

The truth:

If your child doesn’t use the RESP, you can:

• Withdraw your contributions — tax-free

• Transfer investment gains to your RRSP (up to $50,000, if you have contribution room)

• Return unused CESG grants — no penalties or total loss

👉 RESP has a safe exit plan. You’ll never “lose everything” if your child doesn’t pursue higher education.

Myth #4: You need to contribute a lot to benefit from RESP

The truth:

• The government gives you 20% on every dollar you contribute, up to $500/year and $7,200 lifetime per child through the Canada Education Savings Grant (CESG)

• You only need to contribute $2,500/year to receive the full CESG amount for that year

• Low-income families may also receive the Canada Learning Bond (CLB) — even without making contributions

👉 You don’t need to be rich to start an RESP. In fact, low-income families may get even more support.

🎯 What Should You Do Today?

✅ Open an RESP account as early as possible

• The earlier you open it, the more time your investments have to grow

• The sooner you contribute, the more government grants you’ll receive

✅ Contribute at least $2,500/year to maximize CESG

• You can contribute annually or set up monthly payments (just $208/month)

✅ Plan your investments wisely

• RESP funds can grow through GICs, mutual funds, ETFs — helping you build a stronger education fund

✅ TikiTax can help you get started easily

• Clear explanation of RESP types and usage

• Step-by-step guidance to open an account with banks or investment firms

• Smart contribution strategies tailored to your income

• Support in maximizing both CESG and CLB grants

📞 Don’t let misinformation cost you thousands in free money
👉 Contact TikiTax to open the right RESP account
👉 Let’s build a smart education savings plan — because your child’s future deserves more.

📧 Email: info@tikitax.ca
🌐 Website:www.tikitax.ca