RESP

A Registered Education Savings Plan or RESP is a savings program that allows you to pay for the future education of  your children . RESP is registered by the government of Canada and the savings will grow without tax deduction until the registrant enters an educational program after graduating from high school.

Except family plan, usually there are no restrictions on who can open an RRSP for a child. It can be a parent, a grandparent, any relative or even a friend. Government of Canada adds funds to your plan every year via a government educational grant.

Every year government pays 20% for each $2500 invested to low income families as well as an additional $7200 grant for a child. Once the child start a college or a university money taken from RRSP becomes a taxable benefit. Students usually have none or low income, so the tax amount will not be high.