Short answer
For school savings, an RESP usually comes first because the Government of Canada adds a grant of 20% on the first $2,500 you contribute each year. A TFSA is more flexible because the money can be used for anything. Many families use both: enough in the RESP to earn the grant, and extra savings in a TFSA.
Next step: Use the RESP grant finder at https://ironmarkfinancial.ca/calc-resp-grant.html to get your own number. It is no-cost and takes about two minutes.
How does an RESP work?
A Registered Education Savings Plan (RESP) helps you save for a child's education after high school. Anyone can open one, including parents, grandparents and other relatives, at a financial institution of your choice.
The Government of Canada adds to it in two ways:
- Canada Education Savings Grant (CESG). It adds 20% of the first $2,500 you contribute each year, which is up to $500 a year. The lifetime maximum is $7,200 per child. You must contribute to get it.
- Canada Learning Bond (CLB). For families with low income, up to $2,000 per child. No contributions are needed.
Some families get more. For 2026, the CESG can add up to $100 more a year for lower-income families and $50 more for middle-income families.
How much grant does $2,500 a year earn?
If you contribute $2,500 in a year, the basic CESG adds 20%, which is $500. Saving $2,500 a year works out to about $208 a month.
Can I use a TFSA to save for my child?
A TFSA lets money grow without tax on the growth, and you can withdraw it for any reason. For 2026, the TFSA dollar limit is $7,000, according to the Canada Revenue Agency (CRA).
A child cannot open a TFSA until they are 18, so for younger kids the usual approach is to use your own TFSA room to save for them. Unused room carries forward, and amounts you withdraw are added back to your room on January 1 of the next year.
How do an RESP and a TFSA compare?
| RESP | TFSA | |
|---|---|---|
| Built for | Education after high school | Any goal |
| Government money added | Yes, CESG and possibly CLB | No |
| Flexibility | Rules apply to how it is used | Withdraw for any reason |
| Whose money | The plan is set up for a child | Yours, with your own room |
Should I fill the RESP or the TFSA first?
- If school is the goal, an RESP lets you collect the grant, which is money you do not get from a TFSA.
- If the money might be used for other things, like a first car or help with a home, a TFSA keeps your options open.
- If you can do both, use the RESP up to the amount that earns the grant and put extra in your TFSA.
The right mix depends on your income, your goals and how many kids you have. Run your own numbers with the calculators below.
Is there an Ontario RESP grant?
The Government of Canada page on RESPs lists extra provincial benefits only for British Columbia and Québec. Ontario families work with the federal CESG and CLB.
Frequently asked questions
How much does the government add to an RESP?
The CESG adds 20% on the first $2,500 contributed each year, up to $500 a year and $7,200 per child over a lifetime. Lower and middle-income families can receive an additional 10% or 20% on the first $500 contributed.
Do I need to contribute to get the Canada Learning Bond?
No. The CLB is for families with low income and does not need RESP contributions. It provides up to $2,000 per eligible child.
What if I cannot contribute $2,500 every year?
Unused CESG room carries forward until the end of the year your child turns 17, so you can catch up later. The Government of Canada says you can then contribute more than $2,500 in a year and still earn the 20% grant, up to $5,000.
Can grandparents open an RESP?
Yes. The Government of Canada says anyone can be a subscriber and open an RESP for a child, including grandparents, relatives and friends.
Until what age can I earn the CESG?
Until the end of the calendar year the child turns 17. There are extra conditions for 16 and 17 year olds, so read the Government of Canada page.
What is the fastest way to get my own number?
Use the RESP Grant Finder at https://ironmarkfinancial.ca/calc-resp-grant.html. It answers the question: How much will the Government of Canada add to my child's RESP? It is no-cost with no obligation.
Sources and further reading
- How much money can be added to an RESP (Government of Canada)
- Education savings, RESP (Government of Canada)
- Before you contribute to a TFSA (Canada Revenue Agency)
- Calculate your TFSA contribution room (Canada Revenue Agency)
Figures were checked against these pages on October 26, 2026. Limits and benefit amounts change, so confirm the current numbers with the source.
Related guides and tools:
This article is general education, not personal advice. Rules can change, so check the official sources above. In Ontario, life insurance quotes are prepared by a licensed life insurance agent.
Keep reading
How should Burlington and Halton families plan an RESP?
Open an RESP, contribute enough to earn the grant, and check in yearly. A 5-step plan for Burlington and Halton families, with 2026 grant figures.
Read guide →Should I contribute to a TFSA or an RRSP first?
An RRSP can lower your tax now. A TFSA gives flexibility. See how each works, the 2026 contribution limits from the CRA, and the questions to ask yourself.
Read guide →How much money do I need to retire in Canada?
There is no one number. Start with the income you want, subtract CPP, OAS and any pension, and the rest comes from savings. Government figures included.
Read guide →