What is an RESP?
The RESP (Registered Education Savings Plan; REEE in French and in Quebec) is, according to ESDC, a special savings account to pay for a child’s education after high school: trades, CEGEP, college, university or apprenticeships.[1] Technically it is a registered contract between the person who contributes and an institution that administers the plan.[5]
Who can open one, and how?
ESDC puts it this way: any adult can open an RESP to save for someone’s education. The subscriber can be a parent, grandparent, another relative or a friend.[2]
- The beneficiary and the subscriber each need a Social Insurance Number (SIN).[2]
- For plans that are not family plans, there are generally no restrictions on the original subscriber; joint subscribers can be spouses or common-law partners, or two separated or divorced parents.[5]
- The beneficiary must be a Canadian resident when designated.[5]
| Plan type | How it works |
|---|---|
| Individual plan | One beneficiary. It is an option if you have only one child or if you are not related to the child you are saving for.[2] |
| Family plan | The only type of RESP that allows more than one beneficiary. It is an option if you have or plan to have more than one child. Each beneficiary must be connected by blood or adoption to each living subscriber, and must be under 21 when named.[2][5] |
- Choose where to open itAn RESP can be opened at a bank, an investment firm or a credit union.[2]
- Get the SINsThe beneficiary’s, and yours if you do not already have one.[2]
- Apply for the benefits together with the planWhen you open it, your promoter helps you apply for the Canada Learning Bond and the CESG at the same time.[2]
How much can I contribute?
The RESP has no annual contribution limit since 2007. What exists is a lifetime limit of $50,000 per beneficiary, counting all the RESPs in which that person is a beneficiary. CESG payments and provincial program payments do not count toward that limit.[5]
| Rule | Figure |
|---|---|
| Annual limit | None (since 2007) |
| Lifetime limit per beneficiary | $50,000 |
| Time to contribute | Up to 31 years from the day the plan was opened |
| Time to use the money | Up to 35 years |
No annual cap does not mean you should contribute without a plan: what should drive how much you contribute each year is how much CESG you can receive (next lesson).
Government help: the CESG and the Canada Learning Bond
CESG (Canada Education Savings Grant). The government adds 20% of the first $2,500 you contribute in the year, which is up to $500 a year per beneficiary, regardless of family income.[3][4] You need to make contributions to receive it.[2]
| Adjusted family net income (2026) | Additional CESG on the first $500 | Maximum yearly CESG |
|---|---|---|
| Less than $58,523 | 20% = $100 | $600 |
| Between $58,523 and $117,045 | 10% = $50 | $550 |
| More than $117,045 | Not eligible | $500 |
- Lifetime maximum: $7,200 of CESG per beneficiary.[3]
- Until when: it is paid until the end of the calendar year the child turns 17.[3]
- Carry-forward room: if you did not use it all in earlier years, unused CESG accumulates (up to $500 a year for each resident child under 18) and you can receive up to $1,000 of CESG in one year by contributing more than $2,500 that year.[3][4]
- At 16 and 17: it is paid only if, before the end of the year the child turned 15, at least $2,000 had been contributed (and not withdrawn), or at least $100 a year in four earlier years.[3]
Canada Learning Bond (CLB). Help for low-income families: $500 in the first year of eligibility and $100 for each additional year up to and including age 15, for a maximum of $2,000 per child. It applies to children born on or after January 1, 2004. You do not have to contribute to receive it.[3][2] A primary caregiver can request it until the day before the child turns 18.[3]
Provincial help. In British Columbia, the BCTESG gives $1,200 to eligible children aged 6 to 8, if the parent and the child live in that province and the child is a beneficiary of an RESP. In Quebec, the QESI has a lifetime maximum of $3,600 for eligible beneficiaries. Your plan’s promoter can tell you whether it offers these and how to apply.[3][5]
What can I hold inside?
Promoters can invest RESP funds in mutual funds, stocks, GICs and other options such as term deposits or savings accounts, with different risks and returns.[2] Qualified investments are generally similar to those of an RRSP: cash, GICs, Canada and provincial savings bonds, mutual funds and most listed securities. Real property is excluded.[5]
Benefits
- Tax-deferred growth: the money earns interest tax-free while it is in the RESP; the income is taxed only when paid out as educational assistance.[7][5]
- The government contributes: the CESG (up to $7,200 per child) and the Canada Learning Bond (up to $2,000) can add to your contributions.[1]
- Payments for school are taxed to the student: educational assistance payments (EAPs) are included in the beneficiary’s income, not the subscriber’s.[6]
- Your contributions come back tax-free: the promoter can return your contributions to you tax-free.[5][6]
- Flexibility: if the beneficiary does not study, you can keep the plan open, change the beneficiary, transfer the money to other registered plans or close it.[6]
Limits and common mistakes
| Limit | What it means |
|---|---|
| Not deductible | Contributions do not reduce your taxable income.[5] |
| If the beneficiary does not study | If they do not pursue post-secondary education, the CESG is returned to the government. The Canada Learning Bond can only be used for education, so unused amounts are returned too. Your contributions are returned to you tax-free.[4][7] |
| Accumulated income (AIP) | Interest and earnings not used for education can be paid to the subscriber as an AIP. It is taxed at your regular income tax rate plus an additional 20% (12% if you live in Quebec).[6][5] |
| AIP conditions | It is paid only to a subscriber who is a Canadian resident and, in general, after the year that includes the plan’s 9th anniversary with all beneficiaries 21 or older and not eligible for EAPs, in the year of the 35th anniversary, or if all beneficiaries have died. The plan must be terminated by the end of February of the year after the first AIP.[5] |
| Reducing the tax on an AIP | You can reduce the AIP subject to tax by contributing to your RRSP (or your spouse’s) in the year you receive it or in the first 60 days of the next year, up to a lifetime maximum of $50,000. The RRSP contribution must be deductible, which means you need contribution room.[5][7] |
| Over-contributing | If contributions for a beneficiary exceed $50,000, each subscriber pays 1% per month on their share of the excess while it stays in the plan. Withdrawing the excess reduces the tax, but the amount withdrawn still counts toward the lifetime limit.[5] |
| Changing the beneficiary | Contributions made for the former beneficiary go to the new one with their original dates and, if the new one already has an RESP, an excess can result. There are exceptions, for example when the new beneficiary is under 21 and has the same parent as the former one.[5][7] |
| Adding someone who is not a sibling | In a family plan, if you add a beneficiary who is not a sibling and grants have already been paid, you must repay them to the relevant government.[7] |
| Non-permitted investments | 50% tax and, on prohibited ones, 100% on what they generate (see above).[5] |
Withdrawals (EAPs) and transfers
Educational assistance payments (EAPs). These are payments to the student from the grants and the accumulated earnings. The beneficiary includes them as income in the year received and pays tax according to their situation.[6][5] They are paid while the student is enrolled in an eligible post-secondary program and for up to 6 months after the enrolment ends.[5][6]
| Type of studies | EAP limit |
|---|---|
| Full-time (a program of at least 3 consecutive weeks and 10 hours a week) | $8,000 during the first 13 consecutive weeks; afterwards no set limit while the student remains eligible |
| Part-time (at least 12 hours a month of courses) | $4,000 for every 13-week period of enrolment |
The $8,000 cap applies again if the student goes 12 months without re-enrolling. ESDC can approve higher amounts case by case, and the promoter can top up EAPs with contribution refunds, which are tax-free.[6][5] The promoter checks that the school is eligible and will ask for official proof of enrolment.[6]
Withdrawing your contributions. Your contributions can be returned to the subscriber tax-free, and they are not reported as income.[6][5]
Transfers. Most transfers from one RESP to another have no tax implications, although fees may apply.[7] But be careful: because contribution history follows the beneficiary, other transfers can create excess contributions, and a transfer to an RESP whose sibling beneficiary is over 20 can require repaying the CESG and the CLB.[5]
Closing the plan. When it is closed, the grants are returned to the Government of Canada and your contributions are returned to you tax-free. The earnings can be paid to the subscriber (with the AIP tax) or transferred to an RRSP, up to $50,000, under the conditions described.[7][5]
Three examples
The essentials in 5 ideas
- An RESP is a registered plan for education after high school, with a subscriber, a beneficiary and a promoter.
- There is no annual contribution limit; the lifetime limit is $50,000 per beneficiary.
- The CESG pays 20% of the first $2,500 a year (maximum $7,200 for life); the Canada Learning Bond can add up to $2,000 without contributing.
- If the beneficiary does not study, the CESG is returned; accumulated income (AIP) is taxed plus 20%.
- EAPs are taxed to the student; your contributions come back tax-free.
Test yourself
Eight quick questions. Pick an answer and you will see the explanation.
1. What is the lifetime contribution limit per beneficiary in an RESP?
The CRA sets a lifetime limit of $50,000 per beneficiary, counting all RESPs. Since 2007 there is no annual limit.
2. You contribute $2,500 in a year and have no unused CESG room. How much basic CESG do you receive?
The basic CESG is 20% of the first $2,500: $500 a year.
3. You have unused CESG room from earlier years and contribute $5,000 this year. What is the most basic CESG you can receive?
With unused CESG from earlier years you can receive up to $1,000 of CESG in one year: 20% of $5,000.
4. What is the lifetime maximum CESG per beneficiary?
The CESG has a lifetime maximum of $7,200 per eligible child, regardless of income.
5. Do you have to contribute to the RESP to receive the Canada Learning Bond?
According to ESDC, you do not need to contribute to receive the CLB, which can reach $2,000 per eligible child. The CESG does require contributions.
6. Who pays tax on the educational assistance payments (EAPs) the student receives?
EAPs are included in the beneficiary’s income in the year they are received.
7. The beneficiary does not pursue post-secondary education. What happens to the CESG?
If the beneficiary does not pursue post-secondary education, the CESG is returned to the government. Your contributions are returned to you tax-free.
8. There is a $4,000 excess over the lifetime limit and it stays in the plan for 3 months. How much tax is paid?
The excess is taxed at 1% per month: $40 a month for 3 months is $120.