Canada’s Child Benefit vs. RESP: Which is better for my child’s future?

Millennial Parents Guide To Financial Planning For Children

The average Canadian family with two kids will get about $200 more next year and about $500 more in 2019 through the Canada Child Benefit (CCB). And that’s just one advantage.


The recent increase in the CCB was a welcomed gift to families and the second time in two years the Government increased these very important benefits. It’s a clear indication to us that the Government sees money with no strings attached as more valuable than money that has to be directed somewhere specific (like an RESP).

What is the Canada Child Benefit (CCB)?

The Canada Child Benefits were launched in July 2016 to replace the previous Canada Child Tax Benefit and the Universal Child Care Benefit. The CCB is a tax-free monthly payment to all families with children under 18, which parents are free to use and invest any way they think is best for their children’s futures.

Let’s look at the differences between the CCB and the RESP.

Payouts: As of October 2017, the CCB will be a maximum of $6,496 a year for a child between 1 and 6 and $5,481 for a child between 6 to 17. The total tax-free amount a family can receive is $104,748 by the time their child turns 18.

An RESP tops up a $2,500 deposit by the parents with $500 a year until their child reaches age 17. The maximum a family will receive in Canada Education Savings Grants by the time their child reaches 17 is $7,200 is they contribute $36,000.

Increases: The CCB is increased by 1.5% annually to account for inflation. The RESP grants haven’t been increased since 2007, even though tuition costs have increased by 40% by 2015.

Logistics: CCB money is deposited directly into parents’ bank accounts, which parents can invest without any conditions or restrictions for their children’s futures. RESPs must be set up as separate accounts at the bank or group RESP companies.

Rules: Parents can invest their child’s Canada Child Benefit however they feel will be in their children’s best options. RESP funds can only be used for Government approved programs, schools and education-related expenses.

Uses: Canada Child Benefits can be invested in anything for their children’s future even if they choose a different path than university and will continue to grow past age 18.

RESP accounts must be closed if the child has scholarships or chooses a different path and the government grants received must be paid back, even if your advisor lost it on the stock market.

It’s pretty clear which of the two government programs are more beneficial to parents today. Given that education is global and education programs that our children will want to study 18 years from now haven’t been invented.

Parents have to make a choice between depositing $2,500 for an extra grant of only $500 for a single purpose, or invest the same $2,500 Government tax-free gift to build a tax-free and flexible investment that will give your child the freedom to follow any education and any dream in life and not saddled with immense student debt.

The Child Plan™ “participating” whole life plan is a tax-free investment parents and grandparents can open for their children and grandchildren in Canada.

From the day you open a Child Plan™ your child will receive a tax-free annual dividend for life, which will give them the freedom to study anything, anywhere in the world, buy their first home or follow any dream in life they may have.

To learn more about how to invest for your child’s future and request a Child Plan™ personalized illustration click here and find out how to invest your free CCB money wisely for their future.

Insuranceforchildren is Canada’s leader in financial planning for children. Our mission is to educate and empower families on how to invest for their children’s futures so they have the freedom to follow their dreams.

Sample Child Plan™ Cash and Insurance Value Illustration

Based on a Monthly Deposit of $250 per month

Age Accumulated Cash Value Life Insurance Value


$82,568 (Education)



$177,953 (House)



$303,299 (Security)



$834,276 (Retirement)


Sample illustration is for a child under age 1 based on a monthly deposit of $250 for twenty years. There will be no further contributions required after year twenty. The cash and insurance values are based on a dividend interest rate of 6% from a Canadian life insurance company.

Personalize Your Child Plan™

Request a Child Plan™ Illustration and see how much cash value your child will have for their education and for life.

*illustrations are reflective of the annual premium amount

To learn more how Child Plan™ will provide your child with the funds for their future education and financial security for life, book a virtual meeting with a Child Plan™ Advisor.