Thread: RESP Question
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Old 10-01-2016, 01:56 PM   #2
Powerplay Quarterback
Join Date: Jun 2009

The contribution limit per child is $50,000 and you can contribute it all at once, if you want. The reason why folks space out their contributions is to maximize the CESG grants, which is 20% of the contribution up to a maximum grant value of $500 per year (and $7200 limit lifetime). So to maximize your CESG grants, you would have to contribute at least $2,500 per year for 14 years (without exceeding that $50,000 lifetime limit), and at least $1,000 in one year.

The carryforward rule I believe is related to grant-eligible contributions. Let's say you normally contribute $2500 per year to get the $500 grant , but then you missed contributing for a couple of years. The next year, you're allowed to carryforward the contribution from one year previous and contribute $5000 to get a $1000 grant. But the year after that, you wouldn't be able to carryforward the other missing year. But if you refer to the last sentence of my previous paragraph, you can miss some contributions and still maximize your grants.
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