RESP — Registered Education Savings Plan
A Registered Education Savings Plan (RESP) is a long-term savings account designed to help families prepare for a child’s education after high school. The funds can be used for eligible programs at universities, colleges, trade schools, CEGEPs and certain apprenticeship programs. An adult may also open an RESP for themselves.
The cost of post-secondary education can include much more than tuition. Students may also need money for books, supplies, tools, transportation, accommodation and everyday living expenses. Starting an RESP early gives your contributions more time to grow and may allow the beneficiary to receive valuable government education incentives.
We help families establish an RESP strategy based on the child’s age, expected education timeline, household budget and long-term savings goals. Our objective is to make contributions manageable while helping you take full advantage of the grants and investment growth available through the plan.
How an RESP Works
An RESP is opened by a subscriber, who names one or more beneficiaries who may eventually use the funds for post-secondary education. Parents commonly open RESPs for their children, but grandparents, relatives, family friends and other eligible individuals may also contribute.
RESP contributions are not tax-deductible. However, the investment income earned inside the plan can grow on a tax-deferred basis while it remains in the RESP. When the student begins an eligible post-secondary program, the investment growth and government grants can generally be paid to them as Educational Assistance Payments.
These payments are treated as income to the student. Since many students have limited income and may qualify for tuition-related tax credits, the tax payable may be lower than it would have been if the investment income had been taxed in the subscriber’s hands.
The original contributions can generally be returned to the subscriber without additional tax because they were made using after-tax money.
Canada Education Savings Grant
One of the most important advantages of an RESP is access to the Canada Education Savings Grant, commonly known as the CESG.
The basic CESG generally adds 20% to the first $2,500 contributed for an eligible beneficiary each year. This means a $2,500 annual contribution may attract a basic grant of $500. Depending on household income, a beneficiary may also qualify for additional CESG on the first portion contributed during the year.
The lifetime CESG limit is $7,200 for each eligible beneficiary.
Unused basic CESG entitlement may be carried forward. Families who start later may therefore be able to catch up gradually by making larger contributions in future years, subject to the applicable annual grant rules.
We help you determine an appropriate contribution schedule based on the beneficiary’s available grant room, age and the number of years remaining before post-secondary education begins.
Canada Learning Bond
Children from eligible lower-income families may qualify for the Canada Learning Bond, or CLB. The CLB can provide up to $2,000 for an eligible beneficiary, and personal RESP contributions are not required to receive it. The program generally provides an initial amount of $500 followed by additional payments of $100 for each eligible year, subject to the program requirements.
Families may overlook this benefit because they believe they must be able to make regular contributions before opening an RESP. However, an eligible child may receive the Canada Learning Bond even when the family is not currently in a position to contribute.
We can help you understand the available federal incentives and determine which RESP structure may be suitable for your family.
Individual and Family RESP Plans
An individual RESP is established for one beneficiary. This structure may be suitable when saving for one child or when the subscriber wants the account managed separately from the education savings of other family members.
A family RESP may include more than one beneficiary, provided the applicable relationship requirements are satisfied. It is often used by parents or grandparents who are saving for siblings within one plan. A family RESP may provide added flexibility if one child requires more education funding than another or does not pursue eligible post-secondary studies.
The right structure depends on the number of beneficiaries, their ages, your family relationships and the level of flexibility you want. We explain the differences clearly before recommending a plan.
RESP Contribution and Investment Planning
There is no annual RESP contribution limit under the current rules, but the lifetime contribution limit is $50,000 for each beneficiary across all RESPs established for that person. Government grants and eligible provincial education incentives do not count toward this contribution limit.
Contributing more than the amount required to receive the available annual grant may still be appropriate for some families, particularly when the child is young and has a long investment timeline. However, every contribution should be coordinated carefully to prevent an overcontribution.
An RESP is an account structure rather than one specific investment. Depending on the provider and plan, it may hold guaranteed investments, investment funds, equities, bonds, segregated funds or a diversified portfolio.
We assess the beneficiary’s age, the expected withdrawal date and your comfort with market fluctuations before recommending an allocation. When the student is young, the portfolio may place greater emphasis on long-term growth. As the start of post-secondary education approaches, the strategy may gradually shift toward preserving capital and improving access to the funds.
Using RESP Funds for Education
RESP funds may help cover eligible education-related costs such as tuition, books, tools, rent, transportation and other expenses connected with attending an eligible post-secondary program.
Educational Assistance Payments include government grants and investment earnings. For full-time studies, EAPs are generally limited to $8,000 during the first 13 consecutive weeks of enrolment. For eligible part-time studies, the general limit is $4,000 during a 13-week period. Different rules may apply after the initial enrolment period.
We help families plan the timing and amount of withdrawals so the student has access to the money when it is needed while the account continues to be managed efficiently.
Build Their Education Fund with Confidence
Whether your child is a newborn, already in school or approaching graduation, it may not be too late to begin or improve an RESP strategy.
We bring together contribution planning, government grants, investment selection and withdrawal preparation to create an education savings plan suited to your family. With consistent contributions and proper guidance, an RESP can help reduce the future financial burden of education and give your child greater freedom to pursue their goals.
Frequently Asked Questions
The ideal contribution depends on your household budget, the beneficiary’s age, available grant room and education timeline. Many families contribute $2,500 annually to receive the maximum basic Canada Education Savings Grant of $500 for that year. However, families with unused grant room may be able to contribute more and catch up on missed CESG amounts. A personalized contribution plan can help you use the available grants without putting unnecessary pressure on your monthly finances.
Yes. Grandparents can open an RESP for a grandchild or contribute to an RESP already established by the child’s parents, with the subscriber’s cooperation. Before opening an additional account, family members should coordinate their contributions because the $50,000 lifetime contribution limit applies to each beneficiary across all RESPs. Proper coordination also helps prevent overcontributions and ensures government grants are claimed efficiently.
The money is not necessarily lost. Depending on the plan and the circumstances, the RESP may remain open in case the beneficiary attends school later. You may also be able to change the beneficiary or use the funds for another eligible child in a family plan. Your original contributions can generally be returned, while unused government grants may need to be repaid. Investment earnings may be withdrawn or transferred under certain conditions, although taxes and additional charges may apply.
RESP funds may be used for a wide range of reasonable post-secondary education expenses. These can include tuition, textbooks, school supplies, tools, computers, transportation, rent and other living costs while the student attends an eligible program. The financial institution may request proof of enrolment and information about the expenses. Planning withdrawals carefully can help ensure the student receives enough money while keeping the remaining RESP funds invested appropriately.