Richard CanfieldPodcast Host and IBC Advisor, Ascendant Financial · Authorized Infinite Banking Practitioner | Author of 4 Books

Limitations of RESP Grants

9 Jul 2024 · 1 min

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Richard Canfield explains how the Canada Education Savings Grant (CESG) works as an incentive for Registered Education Savings Plans (RESPs). He states the government matches 20% of annual contributions up to $2,500 per child (i.e., $500/year) and that the CESG stops once a lifetime maximum of $7,600 in grant money has been reached; he notes many people are unaware of these limits and comments skeptically that government "free money" is not truly free.

Questions this video answers

$2,500 per year per child.

20% (which equals $500 on $2,500).

$7,600 (lifetime maximum of grant money).

Chapters

What's the carrot that leads people to enter into this arrangement primarily is initially the thought that they want to save for their child's education. And the second thing is that there's a promise of some grant money that's going to be added. Canada Education Savings Grant. And so at a high level, if you put in to a maximum limit of $2,500 per year per child, they will give you 20% as a grant for the end of the year, at the end of the account, which works out to $500. Now they'll continue doing that up to a maximum level, which is $7,600. So once you have contributed annually 2500, eventually you hit a peak where now you've got all of the grant money that's available and you can't get another dollar of that grant money. So there's some limitations there which a lot of people aren't aware of. And that's kind of how it works. And so that's like the carrot that really attracts people to this idea is that, oh, it's free money. I'm going to get free money from the government. Now, you and I both know, Henry, there's no such thing as free when it comes from the hand of the government. But that's just my personal opinion.