One thing to consider is what happens if it’s not used.
If you withdraw an RESP you get taxed on the earnings and your marginal rate plus 20% and you have to pay the grant money back. This roughly leaves you in the same position as if you had invested in a non-tax advantaged account as the 20% extra is equivalent to the amount of income you earned on the grant money.
Now the other option is to put that money in an RRSP. You still have to repay the grant money but you don’t have to pay the 20% penalty so you got free earnings on the governments grant money. So it’s like investing $1000 and getting returns on $1200. But if you have tax advantaged space that you weren’t using and investing in an resp instead and you have a marginal rate is above 35% then investing in the TFSA works out better.
In general a RESP will work out better or close to similar in most scenarios.
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