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An RESP is a registered education savings plan that lets you contribute a lifetime maximum of up to $50,000 per beneficiary. You can contribute to an RESP for up to 31 years, and the plan can stay open for up to 35 years.
Unlike an RRSP, your contributions to an RESP are not tax-deductible. But, the investment income you earn is tax-deferred until you withdraw it.
When you withdraw any income or government assistance from the plan to pay for the beneficiary’s education, it’s taxed at the student's tax rate. That tax rate may be lower than the contributor’s tax rate.