RESP Guide: Grants, Limits and Withdrawals

1. What an RESP (Registered Education Savings Plan) Is and Who Can Open One

The basic idea. A registered education savings plan is a contract between you and a financial institution. You put money in for a child, the federal government (and in two provinces, the provincial government) adds grants, and the money grows without yearly tax. When the child goes on to college, university, an apprenticeship or another qualifying program after high school, the plan pays out to help with costs. The account is built for one goal, so the rules reward you for using it on education and charge you if you do not.

The three people in every plan. The subscriber opens the plan and makes the contributions. The beneficiary is the child who will use the money. The promoter is the bank, credit union, brokerage, robo-advisor or group plan dealer that holds the account and asks the government for grants on your behalf. Spouses or common-law partners can open a plan together as joint subscribers, and grandparents, aunts, uncles and family friends can be subscribers too.

Who can be a beneficiary. To be named in a family plan, each child needs a social insurance number (SIN) and Canadian residency at the time they are added, and must be under 21 when named. Grants follow the same logic: no SIN, no grant. If your child does not have a SIN yet, please apply for one before you open the plan, because grant requests cannot start without it.

Why families use it. The 20% CESG is a guaranteed return on the first $2,500 you put in each year, before any investment growth. No other account in Canada adds government money at that rate on ordinary savings. The tax treatment helps as well: the grants and growth are taxed when the student withdraws them, and most students have little other income, so much of that money can come out with little or no tax.

What an RESP is not. It is not a tax deduction like an RRSP, and it is not a flexible all-purpose account like a TFSA. The money you contribute is after-tax money, and it can always come back to you, but the grants are tied to education. For a wider view of every registered account, see our guide to investment accounts in Canada.

2. Family vs Individual RESP, and Group Plans

Family plans. A family plan can name more than one beneficiary. Every beneficiary must be related by blood or adoption to each living subscriber and must be under 21 when added. That makes the family plan the usual choice for parents with two or more children, or for grandparents saving for several grandchildren. It is the only type of RESP that allows more than one beneficiary, so siblings can share one account, one set of statements and one investment mix.

Individual plans. Any RESP that is not a family plan holds one beneficiary. Because a family plan needs a blood or adoption relationship, an individual plan is the route when the subscriber is not related to the child, for example a family friend or godparent. Other individual-plan rules, such as any age limit for the beneficiary, are not covered here, so confirm them with the promoter before you open one.

Group plans. Group plans, sometimes called scholarship plans, are sold by group plan dealers. Savings are pooled with other children born in the same year, contributions follow a set schedule, and payouts depend on the plan’s rules and on how many members stay to the end. Fees, enrolment charges and the rules on missed payments or leaving early are set in each plan’s prospectus. Please read the prospectus and its fee table before you sign, because leaving a group plan early can cost you part of what you paid in fees.

Which one fits. A family plan is the most flexible for parents with more than one child, because money is not locked to one name. An individual plan suits a single child or a subscriber outside the family. A group plan suits someone who wants a fixed schedule and no investment decisions, and who is confident they can keep paying for many years.

3. RESP Contribution Limit and Key Deadlines

The $50,000 lifetime limit. Each beneficiary can receive up to $50,000 in contributions over their life, counting every RESP that names them and every person who contributes. Parents, grandparents and other relatives all share that one $50,000 space. There is no annual limit, so a family could put the whole $50,000 in at once, although that would earn only one year of grant (more on that in the strategies below).

Contributions are not deductible. You pay into an RESP with after-tax dollars and get no deduction on your return. That is why your contributions can later come back to you without tax: you already paid tax on that money. Grants and government bonds are not contributions and do not use any of the $50,000 limit.

Over-contribution tax. If total contributions for a child go over $50,000, each subscriber pays a tax of 1% per month on their share of the excess that is not withdrawn by the end of the month. The tax is payable within 90 days after the end of the year. For example, a $2,000 excess left in the plan for four months costs $80 ($2,000 x 1% x 4). The risk is highest when grandparents open a second plan without telling the parents, so share your contribution totals across the family.

The grant deadlines. The CESG is paid only on contributions made up to the end of the calendar year the child turns 17. At 16 and 17, a child qualifies only if at least $2,000 was contributed by the end of the year they turned 15, or at least $100 was contributed in any four years before then. Each grant year ends on December 31, so contributions made in January count for the new year.

The plan deadlines. No new contributions can go into a plan after the year of its 31st anniversary. The plan must close by the end of the year that includes its 35th anniversary, or the 40th for a specified plan. A plan that pays an accumulated income payment must close by the end of February of the following year.

4. RESP Grants at a Glance

The Canada Education Savings Grant. Every eligible child gets the basic CESG of 20% on the first $2,500 contributed each year, whatever the family’s income. That is $500 a year. Unused grant room carries forward, so a child can receive up to $1,000 in one year when you catch up, and up to $7,200 over their life. Our full guide to RESP grants has the carry-forward table by age.

The additional CESG. In 2026, when adjusted family net income is under $58,523, the first $500 contributed each year earns an extra 20% ($100), for up to $600 a year. From $58,523 up to $117,045, the extra rate is 10% ($50), for up to $550 a year. Above $117,045 only the basic 20% applies. The $7,200 lifetime cap includes the additional amount.

The Canada Learning Bond. Children from low-income families born in 2004 or later can get $500 in their first year of eligibility and $100 for each later year up to age 15, to a maximum of $2,000. The government also adds $25 with the first bond to help with the cost of opening the plan. You do not need to contribute a dollar, but the child must be named in an RESP and the request must be made before age 21.

Provincial grants. Only two provinces run RESP grants today. British Columbia pays the BC Training and Education Savings Grant, a one-time $1,200 for children born in 2006 or later, with no contribution needed. Quebec pays the Quebec Education Savings Incentive (QESI) of 10% of net contributions, up to $250 a year, or $500 with unused room, plus up to $50 a year more for lower-income families, to a lifetime $3,600.

To see what these add up to for your family, try our RESP calculator.

5. RESP Tax Rules: In, During and Out

Going in. Contributions come from money you have already paid tax on, and there is no deduction. Grants and bonds go in on top of your contributions and are not taxed when they arrive. Nothing about a contribution appears on your tax return.

While it grows. Interest, dividends and capital gains earned inside the plan are not taxed each year. You do not report them, and the plan does not issue yearly tax slips for growth. This is the same sheltering an RRSP or TFSA gives, and it lets the grant money compound for up to 17 years or more.

Coming out for school. When the beneficiary is enrolled in a qualifying program, two kinds of payments can come out. Your contributions come back tax-free to you or to the student. Educational assistance payments, made up of the grants, bonds and all the growth, are paid to the student and taxed as the student’s income. In 2026 the federal basic personal amount is $16,452, so a student with modest income may pay little or no federal tax on an EAP, and tuition credits can reduce tax further.

Coming out without school. If no beneficiary goes on to post-secondary study, your contributions still come back tax-free. The grants and bonds go back to the government. The growth can be paid to the subscriber as an accumulated income payment (AIP), which is added to the subscriber’s income and charged an extra 20% tax (12% in Quebec), unless it is moved into the subscriber’s RRSP. Section 7 shows the numbers.

Who reports what. The student reports EAPs on their own return using the slip the promoter sends. The subscriber reports AIPs and claims any RRSP deduction for an AIP rollover. Returned contributions are not reported by anyone.

6. RESP Withdrawal Rules: EAPs and Contributions

Two buckets, two sets of rules. An RESP withdrawal always comes from one of two buckets. The contribution bucket holds the money you put in. It can come back to you, or be paid to the student, without tax. The EAP bucket holds the grants, bonds and every dollar of growth. It can only be paid to a student enrolled in a qualifying or specified program, and it is taxable to the student. When you ask for money, tell the promoter which bucket to draw from and how much, because the choice changes who pays tax and when.

Which programs count. A qualifying educational program is full-time study of at least 10 hours a week. A specified educational program is part-time study of at least 12 hours a month. Universities, colleges, trade schools and many apprenticeship programs can qualify. The promoter will ask for proof of enrolment, such as a letter or an official enrolment record from the school, before it releases an EAP.

The EAP caps. For full-time study, the most that can be paid as EAPs in the first 13 consecutive weeks is $8,000. For part-time study, the cap is $4,000 for each 13-week period. The full-time cap applies only to the first 13 consecutive weeks, which is why many families take the first $8,000 early in the first term and the rest of the year’s EAP later.

Plan the order. In most cases it pays to draw down the EAP bucket in the early years of school, when the student’s income is lowest, and to keep contributions for later. If the student leaves school early, unused contributions can still come back to you tax-free, while an unused EAP bucket would turn into grant repayments and a taxable AIP. Taking EAPs first protects the grants.

Withdrawing contributions while the child is not in school. You can take your contributions back at any time, but a withdrawal while the beneficiary is not enrolled can trigger a repayment of grant money to the government and may end eligibility for future grants. Ask the promoter to calculate the grant repayment before you take contributions out early.

7. If the Child Does Not Study: AIPs and the RRSP Rollover

First, do not rush. Many students start school a year or two late. A plan can stay open until the end of the year of its 35th anniversary, so there is usually time to wait. In a family plan, another child named in the plan may be able to use the money instead. Closing a plan too early is the most expensive mistake on this list, because grants cannot be recovered once they are returned.

What comes back to you. Your contributions always come back to you tax-free. The CESG, the Canada Learning Bond and any provincial grant go back to the government. What is left is the growth, and that is where the accumulated income payment rules apply.

When an AIP can be paid. An AIP can be paid only to one subscriber who is a resident of Canada, and only if one of three tests is met: the plan has passed the year of its 9th anniversary and every beneficiary is 21 or older and not eligible for EAPs, or the plan is in the year of its 35th anniversary, or every beneficiary has died. After the first AIP, the plan must close by the end of February of the next year.

How an AIP is taxed. The AIP is added to the subscriber’s income for the year and taxed at their marginal rate. On top of that, an extra tax of 20% applies (12% for Quebec residents). On growth of any size, that can take half or more of the money.

The RRSP rollover. A subscriber can move up to $50,000 of AIPs, over their lifetime, into their own RRSP or a spousal RRSP, as long as they have enough unused RRSP room. The contribution must be made in the year the AIP is received or in the first 60 days after. When the promoter receives Form T1171, it does not withhold tax on the amount going to the RRSP. The rolled amount avoids the extra 20% and is taxed only when it later comes out of the RRSP. Please check your RRSP room on your latest notice of assessment first, or use our RRSP contribution limit guide.

The cash route works out to $10,000 x 20.5% = $2,050 federal, $10,000 x 10% = $1,000 Alberta and $10,000 x 20% = $2,000 extra tax, for $5,050 in total. The subscriber’s income rises from $70,000 to $80,000, which stays inside the 20.5% federal bracket and the 10% Alberta bracket for 2026.

8. Closing an RESP

When you must close it. Every RESP has a hard end date: the end of the year that includes the 35th anniversary of the plan, or the 40th for a specified plan. If an AIP has been paid, the plan must close by the end of February of the following year. Contributions stop earlier, after the year of the 31st anniversary.

When it makes sense to close it. The usual time is after the last beneficiary finishes school and the EAP bucket is empty. If money remains in the EAP bucket after the student is done, ask whether another beneficiary in a family plan could use it, or whether the student could take a further program. A student who stops studying may still be able to take EAPs for a period after the program ends; the promoter can confirm the rule for your plan.

The order of payouts at closing. When a plan is closed without further EAPs, three things happen. Contributions are returned to the subscriber without tax. Grants and bonds that have not been paid out as EAPs are returned to the government. Remaining growth is paid as an AIP if the AIP tests are met, or must be dealt with as the promoter’s plan terms allow.

Paperwork to expect. The promoter will ask which payments you want and may need Form T1171 if you plan to roll an AIP into your RRSP. Students receive a tax slip for EAPs, and the subscriber receives one for any AIP. Keep the final statements, because they show how much of the payout was a return of contributions and therefore not taxable.

Transfers instead of closing. If you are unhappy with fees or service, you do not need to close the plan to move it. A transfer from one RESP promoter to another keeps the grants in place when it is done directly between the institutions. Our guide to transferring an investment account explains how a direct transfer works and which fees to expect.

9. What an RESP Can Hold and How It Is Protected

Investment choices. A self-directed RESP at a brokerage can generally hold the same kinds of investments as other registered plans: cash, savings deposits, GICs, government and corporate bonds, stocks, exchange-traded funds and mutual funds. A managed RESP at a robo-advisor or bank holds a ready-made portfolio. A group plan invests the pooled money as its prospectus sets out, usually in conservative fixed income. WealthScale does not recommend specific investments.

Match risk to the time left. An RESP has a known deadline: the first tuition bill. Money needed in two or three years has less time to recover from a market drop than money needed in fifteen. Many families hold more growth assets when the child is young and move toward cash and GICs as the child approaches 17. Our GIC vs high-interest savings comparison explains the low-risk options for the final years, and the best GIC rates in Canada are updated on their own page.

CDIC deposit insurance. Eligible deposits held in an RESP at a CDIC member institution are insured as their own category, up to $100,000 per member institution, separate from your other deposits. CDIC covers savings deposits, GICs and term deposits in Canadian or foreign currency. It does not cover mutual funds, stocks, bonds, ETFs or crypto.

CIPF coverage at a brokerage. If your RESP is at an investment dealer that is a member of the Canadian Investor Protection Fund, all your RESPs where you are the subscriber are covered together up to $1,000,000, separate from your general accounts and your retirement accounts. CIPF protects property that goes missing if a member firm fails. It does not cover drops in market value. CIPF members are regulated by the Canadian Investment Regulatory Organization (CIRO).

10. Self-Directed vs Group RESPs

Self-directed RESPs. At an online brokerage you choose every investment and make every contribution when you like. You can contribute $2,500 a year, catch up with $5,000 in a year, or pause. Costs come from trading commissions, any account fees and the management fees of the funds you choose. You need to rebalance yourself and shift toward safer holdings as the child nears school. Our list of the best self-directed RESP accounts compares the options.

Managed RESPs. A robo-advisor or bank-managed RESP chooses a portfolio for you based on the child’s age and your answers to a short questionnaire. You pay an annual management fee on top of the funds’ own costs, and in return you get automatic rebalancing. Our best robo-advisors in Canada page shows which ones offer RESPs and what they charge.

Group plans. A group plan sets the schedule for you and pools your savings with other families. Some families like the discipline. The trade-offs are less control over investments, enrolment fees that are often paid in the first years, and rules that can cost you if you miss payments, change plans or the child does not enrol in a program the plan accepts. The prospectus is the document that sets all of this out.

Grants are the same in every type. The CESG, the additional CESG and the Canada Learning Bond follow the same rules in all three types, as long as the promoter offers them. The difference is in control, cost and flexibility, not in grant rates.

11. RESP vs TFSA, RRSP and FHSA for Education

RESP vs TFSA. A TFSA has a 2026 dollar limit of $7,000 a year, and anything can come out at any time for any reason without tax. It pays no grants. For education savings, the RESP wins on the first $2,500 a year because of the 20% CESG, which a TFSA cannot match. Once you have contributed enough to collect the full grant, a parent’s TFSA is a flexible place for extra education savings, because the money is not tied to the child enrolling.

RESP vs RRSP. An RRSP is a retirement account. It gives a deduction now and taxes withdrawals later. The Lifelong Learning Plan lets you take up to $10,000 a year, and $20,000 in total, out of your RRSP to pay for full-time study by you or your spouse or partner, then repay it over 10 years. That suits an adult going back to school, not a child. For a child’s education, the RESP is the account built for the job.

RESP vs FHSA. The FHSA is for a first home only, with $8,000 of annual room and a $40,000 lifetime limit. It has no education use. A young adult who has finished school with RESP help may later open an FHSA for their own home, so the two accounts often follow one another.

A sensible order. For many families, the order is: enough in the RESP to collect the full CESG each year, then the parents’ own retirement and emergency savings, then extra education savings in a TFSA. Our TFSA vs RRSP comparison helps decide between the two adult accounts.

12. Special Situations

Newcomers to Canada. A child must have a SIN and be a resident of Canada to be named in a family plan and to receive grants. Families who arrive with older children can still open an RESP right away, but the age 16 and 17 rule means a child who arrives at 15 or later may get only a few years of grant. The earlier the plan opens after arrival, the more grant years the child can use.

Moving between provinces. The provincial grants depend on where the child lives. The QESI requires the beneficiary to be a Quebec resident on December 31 of the year. The BCTESG requires the child to be a B.C. resident and must be requested between the child’s 6th birthday and the day before their 9th birthday. The child must live in B.C. when the grant is requested, so a family that leaves B.C. before the window opens may miss it. Federal grants follow the child anywhere in Canada.

Lower-income families. The Canada Learning Bond pays up to $2,000 without any contribution, and from April 2028 the government will open an RESP automatically for eligible children born in 2024 or later who are not already in an RESP by age 4. Families can ask to opt out starting in 2027. Until then, a family has to open the plan and request the bond.

Large families. The Canada Learning Bond income limit rises with the number of children. For July 2026 to June 2027 it is $58,523 or less for one to three children, under $66,036 for four and under $73,577 for five. A family plan lets siblings share one account while each child keeps their own grant limits.

Grandparents. Grandparents can open their own plan or contribute to the parents’ plan. Every dollar they add counts toward the same $50,000 lifetime limit per grandchild. In a family plan, each beneficiary must be related by blood or adoption to every living subscriber, so check the relationship rule before adding a second subscriber.

Starting late. If the child is already 14 or 15 and has no RESP, contributing at least $2,000 by the end of the year they turn 15 keeps the grant open for ages 16 and 17. Our RESP grant calculator shows how much grant room is still available at each age.

13. Where to Open an RESP

Banks and credit unions. Banks and credit unions commonly offer RESPs that hold savings deposits, GICs and the bank’s own mutual funds. They are easy to open at a branch and often link to your chequing account for automatic contributions. Eligible deposits are protected by CDIC or a provincial deposit insurer.

Online brokerages. A discount brokerage lets you hold ETFs, stocks, bonds and GICs in a self-directed RESP. Costs depend on commissions and account fees. Our reviews of Questrade, Qtrade Direct Investing, TD Direct Investing and RBC Direct Investing list each broker’s account types and fees. Wealthsimple lists RESPs among its self-directed accounts and its managed portfolios; see our Wealthsimple review.

Robo-advisors. A robo-advisor builds and rebalances a portfolio for a yearly fee. That suits families who want an RESP to run itself. Our robo-advisor comparison shows which services include RESPs.

Group plan dealers. Group plans are sold by specialised dealers, often through representatives. Read the prospectus before signing, and compare the total fees with a self-directed or managed RESP.

Questions to ask any provider. Does it offer family and individual plans? Does it apply for the Canada Learning Bond, the BCTESG and the QESI, as well as the CESG? What does it charge to open, hold, and transfer out? Can you set up automatic monthly contributions? Our best RESP providers in Canada ranking compares these points, and our advertiser disclosure explains how WealthScale is paid.

14. RESP Rules People Miss: Common Mistakes

Missing the age 15 deadline. If less than $2,000 has gone in by the end of the year the child turns 15, and there were not four years with at least $100, the child gets no CESG at 16 or 17. A single $2,000 contribution before that December 31 fixes it.

Putting in a lump sum and expecting a big grant. The CESG is capped at $1,000 a year even with carry-forward. A $20,000 deposit in one year earns the same $1,000 maximum as a $5,000 deposit. Spread contributions to collect the grant every year.

Over-contributing across the family. Two plans for the same child, one from the parents and one from grandparents, share the $50,000 limit. Each subscriber pays 1% a month on their share of any excess.

Taking contributions out first. Withdrawing contributions in first year and leaving EAPs for later can leave grants unused if the student stops early. Draw the EAP bucket first in most cases.

Forgetting to request the extra grants. The Canada Learning Bond, the BCTESG and the QESI each need the promoter to request them. Ask your provider to confirm each one is active on your plan.

Closing the plan too soon. A student who takes a gap year may enrol later. Closing the plan sends the grants back for good. Wait until you are sure, and look at the RRSP rollover before taking an AIP in cash.

What You Need and What You Get

How an RESP Works, Step by Step

1. Get the child a SIN. No grant can be requested without one.
2. Pick the plan type and provider. Choose family, individual or group, and a self-directed, managed or bank plan.
3. Open the plan and request every grant. Ask for the CESG, the additional CESG, the Canada Learning Bond and any provincial grant on the application.
4. Contribute every year. $2,500 a year collects the full $500 basic CESG; up to $5,000 in a year catches up on missed years.
5. Invest for the time left. Hold more growth assets early and move toward cash and GICs as the child nears 17.
6. Withdraw when the student enrols. Take EAPs first, up to $8,000 in the first 13 weeks of full-time study, and contributions later.
7. Close the plan when the money is used. If anything is left, look at another beneficiary or the RRSP rollover before an AIP.

10 RESP Strategies That Get You More

To set a monthly amount that reaches a savings target by your child’s first year of school, use the savings goal calculator below.

Illustrative Example: One Child, Birth to Graduation

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Sharad is a CPA Ontario member (No. 61040184) and a Certified Public Accountant licensed in Washington and Montana, with more than 15 years in accounting and tax, a Diploma in Banking and Finance and a Certificate in Small Business Finance. He checks WealthScale content against primary sources. WealthScale is independent of his firm, Gondaliya CPA Professional Corporation, and provides general information only, not personal financial, investment, tax or legal advice.

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