Registered education savings plan (RESP)

Pave the way to your kid’s education

Take advantage of the RESP by contributing today towards your child’s education and receive up to $7,200 in federal government grants. In some cases, get as much as $2,000 in additional grants.

What is an RESP?

An RESP is a registered account that is supported by the federal government and sometimes provincial governments. The purpose of this account is to encourage you to save money for your child’s future education. The investment income in an RESP grows tax-free, and the lifetime limit for each child is $50,000.


Any excess amount contributed can be taxable at a 1% per month tax rate until the over contributed amount is withdrawn. Make sure you work with an advisor to avoid this.

Grow your money tax-free

Depending on the disease diagnosed, a waiting period may apply.

Government grants

You’ll receive up to $500 per year for a lifetime of $7,200 per child from the government, and in some cases even more.

Withdraw at lower tax rate

Money paid out of the RESP as an Educational Assistance Payment is taxed in the hands of the student. Since many students have little or no other income, they can usually withdraw the money tax-free.

How does RESP work?

  • Parents
  • Guardians
  • Grandparents
  • Relatives
  • Other family members and friends

You can contribute up to $50,000 in a RESP, but there are some limits regarding the education savings grants received from the federal government.


Saving early makes a difference

Your child can receive up to $500 per year in federal government grants if you contribute $2,500 annually. 

If you missed a year, you can carry forward any missed contribution. However, only contributions up to $5,000 per year will attract grants from the government. For example, if you open an RESP for your child in the calendar year your child turns 12, you would only have 6 years to contribute and double-up the grant amounts. This is a reason to start saving early.


Every dollar counts

The maximum grants your child could receive in the RESP is $7,200. Grants are only available on contributions made by the end of the calendar year in which your child turns 17 years old. Usually, the grants are deposited into the account 4-6 weeks after the contributions are made. If you contribute $200 monthly for example, you’ll notice multiple grants of $40 throughout the year. 


Additional Grants

Additional grants can be made available to you if your family earned income is low. The federal government offers additional grants for up to $2,000 which includes up to $500 for the first year of eligibility and up to $100 each year the child continues to be eligible (up to age 15).


If your child decides not to pursue university or college, it’s good to know that they have other options to choose from without losing their grants. They can still benefit from the RESP through other programs like certain educational studies abroad, trade schools and apprenticeships.


Take your time

The RESP will remain open for up to 35 years, giving your child more time to think about their educational roadmap. 


Shareable Grants

In a family plan, your grant money can be shared with other siblings given they have the grant room.

Money you contributed

If your child decides not to pursue further education, you can withdraw all your initial contributions without paying taxes or penalties.


Government grants and investment earnings

The grants will be reimbursed to the government, and all your investment earnings will be taxed as income in the year you make the withdrawal. In Addition, you can be subject to an additional 20% tax on your investment earnings.


Transfer to your RRSP

You can transfer up to $50,000 of your contributions to your registered retirement savings plan (RRSP) or your spouse’s RRSP. This option can help you avoid taxes on the investment income earned in your RESP.


Learn more about RRSP >

Have any question about RESP?

Our team can answer all your questions, understand your situation and help you build a plan.