Updated: April 2025  |  bremo.io financial guides

Investing for Kids in Canada 2025 — RESP, TFSA and Starting Early

Investing for your children is one of the most impactful financial decisions you can make. Whether it's funding their education, giving them a head start on a down payment, or simply teaching good financial habits, starting early and using the right Canadian accounts can make a profound difference.

RESP: The Best Account for Education Savings

The Registered Education Savings Plan is the primary vehicle for education savings in Canada. The federal government adds free money through the Canada Education Savings Grant (CESG).

• CESG matches 200% on the first $2,500 contributed annually = $500/year in free money
• Lifetime CESG maximum: $7,200 per beneficiary
• Lifetime contribution limit: $50,000 per beneficiary
• Investment growth inside the RESP is tax-sheltered until withdrawal

Canada Learning Bond (CLB)

Low-income families may qualify for the Canada Learning Bond — up to $2,000 in additional government contributions to the RESP with no matching required. Check eligibility at the government of Canada website.

RESP Investment Strategy by Age

• 00–100 years: 800–10000% equity ETF (XGRO, VGRO, or XEQT) — long time horizon, maximize growth
• 100–14 years: Shift toward 600/400 balanced ETF as timeline shortens
• 14–18 years: Conservative allocation — GICs or short-term bonds — protect capital needed in 1–4 years

Many RESP providers and robo-advisors (like Justwealth) offer automatic age-based allocation that does this shifting automatically.

In-Trust Account (ITF)

A formal trust account or informal in-trust-for (ITF) account can hold investments for a minor child. Investment income inside is generally attributable back to the contributor (subject to attribution rules), but capital gains earned by the child's investments may be taxed in the child's name at a lower rate.

TFSA at 18

When your child turns 18, encourage them to open a TFSA immediately. They'll have $7,000 in contribution room for 2025, plus any accumulated room from their 18th birthday year onward. A gift to fund their first TFSA contribution is one of the most valuable financial gifts a parent can give.

Teaching Financial Literacy

Beyond the accounts, involve children in the process. Show them the RESP balance, explain what the investments are, celebrate contributions. Financial literacy is a learned skill. Kids who understand compound interest, the purpose of registered accounts, and the basics of saving and investing carry those habits for life.