RESP (Registered Education Savings Plan)

A Registered Education Savings Plan (RESP) is a tax-advantaged savings plan designed to help you save for a child’s postsecondary education. The money you invest can be used to cover tuition, housing, books, food, transportation, and other related expenses.

Just like an RRSP, funds in an RESP grow tax-free until they’re withdrawn to pay for educational costs.

Anyone can open an RESP for a child — parents, grandparents, aunts, uncles, godparents, or friends. A child can also be the beneficiary of more than one RESP.

If multiple people are contributing, make sure total contributions don’t exceed the government’s lifetime limit to avoid penalties.

You can name any child as the beneficiary — they don’t have to be related to you. You can also change the beneficiary later, as long as the RESP rules still apply to the new beneficiary’s age.

• Lifetime maximum: $50,000 per child
   
• No annual contribution limit
   

This flexibility allows you to contribute according to your budget, as long as you don’t exceed the lifetime cap.

The beneficiary of an RESP may also be eligible for the Canada Learning Bond (CLB) and the Canada Education Savings Grant (CESG). 

• The CLB provides up to $2,000 (lifetime maximum) in an RESP for eligible children from families living with low income
  • No contributions to the RESP are needed to get the CLB
  • A beneficiary will receive $500 their first year of eligibility, then another $100 for each year of eligibility year after until the age of 15
  • The CLB is retroactive. Primary caregiver can request the CLB for an eligible child until the day before they turn 18.
  • It must be claimed before the beneficiary turns 21

• The CESG provides up to $7,200 (lifetime maximum) in an RESP for eligible children regardless of income
  • Contributions must be made to the RESP to get the CESG
  • The CESG adds a maximum of $500 to an RESP each year, and up to another $100 for eligible families living with low or middle- income
  • If a subscriber does not receive the maximum CESG amount in a given year, the subscriber can catch up on this amount by making more contributions to the RESP in the following years
  • The CESG is available until the end of the calendar year that the beneficiary turns 17
     

Some provinces also offer their own grant programs, which are added directly to your RESP and grow alongside your contributions — giving your savings an extra boost.

If the child decides not to pursue higher education, you have options:

• Name a new beneficiary
   
• Withdraw the funds (some taxes and penalties may apply)
   
• Transfer up to $50,000 to your RRSP (if you have contribution room)
   
• Donate the funds to a registered educational institution