RESP Calculator: Project Contributions, CESG and Growth

This RESP calculator estimates how much an RESP could hold by the time your child finishes high school. Enter the current balance, what you plan to contribute each year, the child’s age and an expected return; it adds the Canada Education Savings Grant (CESG) and growth year by year. The rules behind the numbers are explained in the complete RESP guide, and the RESP hub lists every related guide.

How the calculator works

For each year up to age 18, it:

1. adds your yearly contribution, stopping at the $50,000 lifetime limit;
2. adds a basic CESG of 20% on up to $2,500 of it ($500 a year), or on up to $5,000 (at most $1,000) when grant room from earlier years is unused, through the year the child turns 17 and until the $7,200 lifetime limit is reached. Grants in the years the child turns 16 and 17 are added only if at least $2,000 was contributed by the end of the year they turned 15, or at least $100 in each of 4 years;
3. applies the return you entered to the whole balance.

A few simplifications to keep in mind:

• It models the basic grant only. The income-tested Additional CESG, the Canada Learning Bond and provincial grants are left out, so lower-income families and BC and Quebec residents will see less government money than they could receive. How those extra amounts work is explained in our guide to maximising the CESG.
• An existing balance is treated as past contributions when estimating how much of the lifetime CESG has already been paid and whether the age-16/17 contribution test is met. If the balance includes a lot of growth, the calculator may understate the grant still available.
• It starts at the child’s next birthday. The first row is the year the child turns one year older than the age entered.

Reading the results

• Total contributions is what you put in. It comes back to you tax-free.
• Total CESG is the government grant. It is paid to the student as part of their withdrawals, or goes back to the government if the child never uses the plan for school.
• Growth is the investment income. Like the grant, it reaches the student as taxable Educational Assistance Payments.

How those two taxable parts are paid out, and how students keep the tax on them low, is covered in our RESP withdrawal guide. If the child doesn’t end up going to school, the grant and growth are handled differently; the options are compared in what happens if your child doesn’t go to university.

Choosing a return

The calculator uses one rate for every year. Real returns swing from year to year, and a plan that shifts toward GICs and bonds as enrolment approaches will usually earn less in its last few years than in its early ones. A few ways to use the tool:

• Run it at two or three rates to see the range rather than one number.
• For a plan held mostly in savings or GICs, use a rate close to current GIC rates, which our GIC calculator can help estimate.
• For a stock-heavy plan, our page on historical stock market returns shows long-run averages and how much single years vary.

Investment mix by the child’s age

Because the money is needed on a known date, many families reduce risk as the child gets older:

Some managed RESP portfolios make this shift automatically, such as Justwealth’s education target-date portfolios; our comparison of RESP providers covers the options.

Related calculators

• TFSA calculator, for comparing an RESP with saving in a TFSA
• RRSP calculator
• Investment calculator
• Compound interest calculator
• Income tax calculator, for estimating tax on a student’s withdrawals