IFIC Mutual Funds Licensing Practice Exam · Question
What is the primary purpose of the Canada Education Savings Grant (CESG) provided within an RESP?
The CESG is a government grant that matches a percentage of contributions made to an RESP, up to a certain annual maximum and a lifetime maximum per beneficiary
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Question: What is the primary purpose of the Canada Education Savings Grant (CESG) provided within an RESP?
Answer options:
- To provide a tax deduction for RESPs contributions. ✅ To match a percentage of contributions made to an RESP by the subscriber.
- To guarantee the original principal contributions made to an RESP.
- To automatically provide a lump sum of $500 per year regardless of contributions.
Correct answer: To match a percentage of contributions made to an RESP by the subscriber.
Explanation: The CESG is a government grant that matches a percentage of contributions made to an RESP, up to a certain annual maximum and a lifetime maximum per beneficiary. It is not a tax deduction, guarantee, or automatic lump sum.
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