A RESP account allows you to set aside funds for a child or grandchild’s education, where the growth and income is not taxable – and! – the government will contribute to the RESP with a tax-free grant equal to 20% of your contribution. The limit for 2014 is $2500 per child, plus the ability to make up for one missed year. While there is no tax deduction for the contributions, RESP’s are still worthwhile because of the 20% grant. When the funds are withdrawn for a child’s education, they are taxed in the child’s hands, generally at a low rate (or no tax at all).