Education Planning
Registered Education Savings Plan
The RESP is a tax-sheltered savings vehicle designed to help Canadian families save for a child's post-secondary education. Contributions grow tax-free inside the plan, and the federal government provides matching grants that can add thousands of dollars to your savings over time. Understanding how the RESP works, and how to structure contributions to capture the maximum grant amount, is one of the most straightforward financial planning decisions a Canadian family can make.
Free RESP Setup Guide
An 11-page branded PDF that walks you through the entire RESP process, from opening the account to claiming every government grant your family is eligible for. Includes:
- Step-by-step RESP opening instructions
- 2025 CESG income tables and Additional CESG rates
- Canada Learning Bond eligibility and retroactive claims
- BCTESG application window for BC families
- Contribution strategy, withdrawal rules, and government form links
In This Guide
Lifetime Contribution Limit
$50,000
Per beneficiary
CESG Match Rate
20%
On first $2,500/yr
Max Annual CESG
$500
Per beneficiary
Lifetime CESG Max
$7,200
Per beneficiary
How RESPs Work
The basic mechanics of opening, contributing to, and withdrawing from an RESP.
Open an RESP
A subscriber (typically a parent or grandparent) opens the account and names a beneficiary (the child). The child needs a Social Insurance Number. You can open an RESP as soon as the child is born.
Make Contributions
Contribute up to $50,000 per beneficiary over the lifetime of the plan. There is no annual limit, but contributing $2,500 per year maximizes the annual CESG grant. Contributions are not tax-deductible.
Receive Government Grants
The federal government matches 20% of your annual contributions through the CESG, up to $500 per year per beneficiary. Lower-income families may qualify for additional grants and the Canada Learning Bond.
Withdraw for Education
When the beneficiary enrolls in a qualifying post-secondary program, funds are withdrawn. Your original contributions come back tax-free (PSE). Grants and growth are taxable in the student's hands (EAP), typically at a very low rate.
Canada Education Savings Grant
The CESG is free money from the government. Here is how it accumulates over time.
CESG Accumulation Over Time ($2,500/yr contributions)
The federal government matches 20% of your annual RESP contributions, up to a maximum of $500 per year per beneficiary. To receive the full $500, you need to contribute at least $2,500 in that calendar year. Contributing more than $2,500 does not increase the CESG for that year. The lifetime CESG maximum is $7,200 per beneficiary. If you contribute $2,500 every year starting from birth, you will reach the $7,200 maximum in approximately 14.4 years, well before the child turns 18.
CESG Catch-Up Strategy
Missed years? You can carry forward unused CESG room and reclaim it.
If you did not contribute to an RESP in previous years, the unused CESG room carries forward. Each year of unused room adds $500 in potential CESG. To catch up, you can contribute $5,000 in a single year to receive $1,000 in CESG ($500 for the current year plus $500 of carried-forward room). The maximum CESG in any single year is $1,000, regardless of how much unused room has accumulated.
Example: Starting at Age 5
If you open an RESP when your child is 5, you have 5 years of unused CESG room ($2,500 in potential grants). By contributing $5,000 per year for 5 years, you can recover all the missed CESG while also earning the current year's grant. After catching up, you can reduce contributions to $2,500 per year and still maximize the annual CESG.
Catch-up room only accumulates from the year the RESP is opened or the year the child turns 1 (whichever is later). Opening an RESP early, even with a small initial contribution, starts the clock on CESG room accumulation.
Family vs Individual Plan
Choosing the right plan type depends on your family structure.
| Feature | Individual Plan | Family Plan |
|---|---|---|
| Who can open it | Anyone (parents, grandparents, friends, the child themselves) | Parents and grandparents only |
| Beneficiaries | One child per plan | Multiple children (must be siblings by blood or adoption) |
| CESG flexibility | Grants tied to one child | Unused EAP can be redirected to siblings (within limits) |
| If child doesn't attend school | Change beneficiary or collapse plan | Redirect funds to siblings who do attend |
| Best for | Only child, or contributions from non-family members | Families with multiple children (most common choice) |
For most families with more than one child, a family plan offers greater flexibility. The $50,000 lifetime contribution limit and $7,200 CESG limit still apply per beneficiary, regardless of plan type.
Withdrawal Rules
Understanding EAP vs PSE withdrawals and how they are taxed.
PSE (Post-Secondary Education)
Your Original Contributions
- Withdrawn tax-free (you already paid tax on this money)
- No limit on withdrawal amount
- Paid to the subscriber (you), not the student
- Can be used for any purpose once withdrawn
EAP (Educational Assistance Payment)
Grants + Investment Growth
- Taxable in the student's hands (usually low or zero tax)
- $8,000 limit in first 13 weeks of full-time enrollment
- $4,000 per 13-week period for part-time enrollment
- Must be used for education-related expenses
Withdrawal Strategy Tip
In the first year of post-secondary, withdraw EAP first (up to the $8,000 limit) to take advantage of the student's low tax bracket. After the first 13 weeks, there is no limit on EAP withdrawals. Use PSE withdrawals to supplement if needed, since those are always tax-free. This approach maximizes the tax efficiency of the plan.
What If Your Child Doesn't Attend?
Your money is not lost. Here are your options.
In a family plan, if one child does not attend post-secondary, the EAP (grants and growth) can be redirected to a sibling who does enroll. This is the simplest and most tax-efficient option. The $7,200 CESG lifetime limit still applies per beneficiary.
Key Numbers at a Glance
Quick reference for RESP limits, grants, and rules.
| Item | Amount / Rule |
|---|---|
| Lifetime contribution limit | $50,000 per beneficiary |
| Annual contribution limit | None (but $2,500 maximizes CESG) |
| Basic CESG rate | 20% on first $2,500/yr |
| Maximum annual CESG | $500 (or $1,000 with catch-up) |
| Lifetime CESG maximum | $7,200 per beneficiary |
| Canada Learning Bond maximum | $2,000 per child (low-income) |
| Plan lifespan | 35 years (40 for DTC-eligible) |
| EAP limit (first 13 weeks, full-time) | $8,000 |
| RRSP transfer (if child doesn't attend) | Up to $50,000 (requires RRSP room) |
| Over-contribution penalty | 1% per month on excess over $50,000 |
Important Notes
Conditions, limitations, and what to discuss with your financial professional.
EAP withdrawals require enrollment in a qualifying educational program at a designated educational institution. This includes universities, colleges, CEGEPs, and many trade and vocational schools in Canada. Some foreign institutions also qualify. The program must be at least three consecutive weeks long with a minimum of 10 hours of instruction per week (full-time) or 12 hours per month (part-time).
This guide is for educational purposes only and does not constitute financial, tax, or investment advice. RESP rules, contribution limits, grant amounts, and income thresholds are subject to change by the federal government. Your actual results will depend on your specific financial situation, contribution history, and investment returns. Consult a licensed financial professional before making RESP decisions.
RESP Projection Calculator
See how your contributions, CESG, and growth could add up by the time your child turns 18.
Projected at 18
$82,355
Your Contributions
$44,928
CESG Grants
$7,200
of $7,200 max
Investment Growth
$30,227
Projections are illustrative only. Actual returns depend on market conditions and investment choices. Growth rates are not guaranteed. CESG amounts assume no prior CESG has been received and no catch-up contributions.