Saving for post-secondary education? This guide explains RESP Canada basics so you can make informed choices about education savings Canada. Below you'll find RESP explained: what it is, how government incentives work, contribution and withdrawal rules, and practical steps to open and manage a plan.
What is an RESP?
Registered Education Savings Plan (RESP) is a tax-advantaged account to save for a child's post-secondary education.
Account holder: usually a parent, grandparent, or guardian who opens and contributes to the plan.
Beneficiary: the child (or eligible student) who receives the funds for education.
Note: RESPs don't change your eligibility for government benefits such as Canada Child Benefit.
Key government incentives
Canada Education Savings Grant (CESG) — the federal government matches a portion of annual RESP contributions up to a lifetime limit. See the official details at the Government of Canada's page on the Canada Education Savings Grant.
Canada Learning Bond (CLB) — for eligible low-income families, the CLB adds money to an RESP even if no contributions are made. Learn more at the Government of Canada's Canada Learning Bond page.
Provincial programs — some provinces may have additional incentives; check provincial resources for details.
Types of RESPs
Family RESP
Beneficiaries must be related by blood or adoption to the subscriber.
Contributions can be shared among siblings.
Individual RESP
One beneficiary — good for single children or a parent saving for themselves.
Group RESP
Operated by scholarship plan dealers; follow strict rules and may have higher fees and less flexibility.
Contribution limits and grant rules
Lifetime contribution limit: $50,000 per beneficiary.
No annual contribution limit federally for the RESP itself, but the CESG is calculated on contributions up to $2,500 per year.
CESG lifetime limit: $7,200 per beneficiary.
Check eligibility and track grant entitlements through your RESP provider and via the CRA: use CRA My Account.
Tax treatment — how RESP withdrawals work
RESP withdrawals occur in two parts:
Refund of Contributions (ROC) — your original contributions are tax-free to the beneficiary (or returned to the subscriber).
Educational Assistance Payments (EAPs) — consist of investment growth and government grants; taxed in the beneficiary's hands when withdrawn. Because students often have low income, tax payable is often minimal.
Important: If the beneficiary does not pursue post-secondary education, rules apply for returning government grants and for taxation on accumulated earnings.
Step-by-step: How to open and set up an RESP
Decide the RESP type (family, individual, or group) based on family needs.
Compare providers (banks, credit unions, scholarship plan dealers, investment firms). Look at fees, investment options, customer service.
Gather documents: Social Insurance Numbers (SIN) for subscriber and beneficiary, ID, and contact info.
Apply and designate beneficiaries: choose contribution frequency (monthly, annual, lump sum).
Confirm grant registration: ensure CESG/CLB applications are submitted; monitor through your RESP provider and CRA My Account.
Review annually: adjust contributions, check investments, and ensure you're maximizing grants.
Choosing a provider: what to compare
Fees: account maintenance, management expense ratios (MERs), transfer-out fees.
Investment options: GICs, mutual funds, ETFs, managed portfolios.
Flexibility: contribution rules, beneficiary changes, transfer policies.
Customer service: branch access, online tools, advisors.
Safety: look for CDIC coverage for eligible deposit products or provincial protections for credit unions.
Common RESP decisions and tips
Start early — time in the market helps compound returns and makes it easier to capture CESG each year.
Maximize CESG — contribute at least $2,500 per year per beneficiary to get the full annual grant (up to available carry-forward room).
Use catch-up rules — if you didn't contribute in earlier years, you can catch up on CESG entitlement subject to limits.
Consider TFSA/RRSP trade-offs — if saving for older students or different goals, TFSAs or RRSPs may sometimes be relevant.
Avoid high-fee group plans unless you understand the specific contract terms.
What if the child doesn't attend post-secondary?
Transfer options:
Transfer contributions to another beneficiary (family RESP) without tax consequences.
Transfer funds to an RRSP of the subscriber (subject to RRSP contribution room) — only the accumulated income portion up to specific limits.
Canceling: if you close an RESP and grants must be repaid, the plan's earnings (investment growth) may be taxed and subject to penalties.
Checklist: Before you open an RESP
- Confirm beneficiary's SIN and birthdate.
- Compare provider fees and investment choices.
- Understand how grants (CESG/CLB) apply and how to claim them.
- Decide on contribution schedule (automatic monthly vs. lump sum).
- Keep records and check grant status yearly via CRA My Account.
Useful official resources
For general RESP rules and taxation: see the CRA's page on Registered Education Savings Plans (RESPs).
For program details on grants and bonds: visit the Government of Canada's Canada Education Savings hub.
For consumer guidance: review the Financial Consumer Agency of Canada's RESP basics.
Frequently asked questions (short answers)
Can anyone open an RESP? Yes — typically parents, guardians, or grandparents can open one for a child.
Can I contribute after my child turns 18? Yes, but CESG eligibility may be limited; lifetime contribution limits still apply.
Are RESPs covered by government benefits? No — RESP assets are counted differently; they do not affect CPP/OAS, but may affect provincial benefits; check specific program rules.
RESP explained: it's a flexible, government-subsidized way to save for post-secondary education. Start early, prioritize maximizing CESG and CLB where eligible, and choose a provider whose fees and investment choices match your family's needs.