Saving for a child’s education is one of the wisest investments a Canadian parent can make. Because the cost of going to college or university keeps going up, it’s normal for families to wonder how to cover the bills when the time comes. A Registered Education Savings Plan (RESP) is one of the best tools for the job. You can open one anytime, but the biggest benefits come from starting early—both for your savings and your peace of mind.
In this post, we’ll look at why making RESP deposits as soon as possible is the smartest choice for Canadian families.
- Unlocking Compounding Growth
The top reason to jump on an RESP right after your child is born is the magic of compound interest. The earlier you save, the longer your money can grow without you doing much. Even small monthly deposits can balloon into a big sum over 15 to 18 years. For instance, if you save $100 a month starting at birth, that could turn into tens of thousands of dollars by the time your kid heads to university.
The moment you delay saving, you miss years of potential growth, and you can’t go back. Beginning the RESP early means every dollar can work for as long as possible, turning the funds into a much larger nest egg when it’s finally needed.
- Focus on Free Money from the Government
One big reason to open an RESP as soon as possible is to maximize the money the government gives families. Through the Canada Education Savings Grant (CESG), the government matches 20% of annual contributions up to $500 per child, with a lifetime maximum of $7,200. Families with lower incomes may also qualify for the Canada Learning Bond (CLB), which provides additional funds without requiring contributions.
When parents set up the RESP sooner, they make sure they can claim this cash grant for as many years as possible. Delay, and you forfeit money that could cut future school bills by a big chunk.
- Smaller Savings Over a Longer Time
Waiting to save can make school costs feel impossible. If you open an RESP later, you’re forced to save bigger amounts as tuition gets closer. Starting early, by contrast, lets you spread the same savings goal over many years, so you can make smaller, easier payments. Rather than cramming later, you build the fund bit by bit.
Getting into that saving habit is powerful. A little bit set aside each month adds up, builds interest, and teaches both parents and kids that saving is a normal part of family life. The routine builds momentum and, over time, smooths the path to managing future education costs.
Flexibility for Different Learning Paths
A key advantage of the Registered Education Savings Plan (RESP) is its flexibility. You can use the money for many types of post-secondary programs—universities, colleges, technical schools, apprenticeships, and some foreign schools. When you open the RESP early, you ensure that whatever option your child later chooses, the money is ready.
Knowing that every aspiration can be financed brings comfort to families.
Boosts a Savings and Learning Mindset
The best time to open an RESP is early—before your child is even in school. Doing this doesn’t just grow a financial cushion; it shows kids that saving for education is a priority. They hear conversations about contributions, they see the statements, and they understand that the family is committed to learning. This teaches them how to plan and value education, planting the seeds of long-term success.
RESP and the Tax Advantage
Funding an RESP is smart, and part of the reason is its tax perks. Money you put in doesn’t reduce your tax bill now, but any growth inside the account is tax-sheltered. When you or your child eventually withdraw the funds for school, the money is taxed in the child’s hands—usually at a much lower rate. Starting early gives the money more time to grow tax-free, which means when the statement is finally used, it has more to offer.
Final Thoughts
Canadian families that open an RESP as soon as possible gain a powerful advantage for their child’s education. Saving for school is really saving for the rest of their lives, and this account guarantees that money is there when it’s needed. Early partnership with the Canada Education Savings Grant, the magic of compounding returns, and the comfort of knowing future tuition will be covered are just a few of the reasons to act sooner rather than later. Plus, when school choices change—from college to university to trades—the RESP’s built-in flexibility means that families can easily shift gears. There is no better assurance of a brighter future.
