The RESP, properly explained

The one account built to pay for a Canadian kid's education, and the only one where the government adds money because you saved. Figures come from CRA's and ESDC's own pages.

The education savings plan About a 5-minute read 7 sections

  • $7,200 CESG grant
  • $2,000 Learning Bond
  • $50,000 Your contributions

What it is

An account for a child's education after high school. It grows untaxed, and the government adds to what you contribute.

The grant stack

Three federal programs plus two provincial, and they stack. Most families use only the first.

1. CESG — the basic 20%

Pays 20% of contributions
Yearly cap $500 (on the first $2,500 contributed)
Lifetime cap $7,200 per child
Carry-forward Accrues with or without an account: $400/yr 1998–2006, $500/yr since 2007
Catch-up Put in $5,000, collect $1,000 in one year
Ends 31 December of the year the child turns 17

⚠ The 16-and-17 trap

For any CESG at 16 or 17, one of these must already be true:

  • $2,000 contributed and not withdrawn, or
  • $100 contributed in any four earlier years and not withdrawn.

Open at 16 with no history and there is no grant at all — growth is still sheltered, the 20% is gone. $100 a year from any age keeps the door open.

2. Additional CESG — more on lower income

Extra on the first $500 each year. Published for the 2025 tax year:

Adjusted family net income On the first $500
Under $57,375 +20% — up to $100
$57,375–$114,750 +10% — up to $50
Over $114,750 not eligible

Maximum yearly CESG is therefore $500–$600. Indexed each year.

3. Canada Learning Bond — no contribution needed

Pays $500 the first year the child is named, then $100 per eligible year to 15
Lifetime cap $2,000
You contribute Nothing
Eligibility Born on or after 1 Jan 2004 · Canadian resident · valid SIN · named in an RESP · income test met in at least one year
Income test For the 1 Jul 2025 – 30 Jun 2026 benefit year, families with 1–3 children qualified up to $57,375 adjusted income. Indexed each benefit year
Retroactive Claimable back to birth

A nine-year-old with no RESP may have thousands waiting on an account existing.

4. Provincial — BC and Quebec

  • British Columbia — BCTESG. One-time, residency and age-window conditions, no contribution.
  • Quebec — QESI. Refundable tax credit paid into the RESP on contributions, more on lower income.

Contribution rules

  • $50,000 lifetime per child, excluding government money.
  • No annual limit — but grant counts only the first $2,500/yr, so one big deposit forfeits the rest permanently.
  • Grant-efficient: $2,500/yr, or $5,000/yr while carry-forward room lasts.
  • Over-contributing is taxed monthly until withdrawn. If several relatives contribute, one keeps the running total.
  • Plan-open and contribution deadlines differ by plan type — check CRA for the plan you hold.

Which plan, and where

Family plan Individual plan
Beneficiaries Several, related by blood or adoption One, no relationship needed
If one child skips Earnings move to a sibling —
Grant Tracked per child; nobody exceeds $7,200 Per child
Suits More than one child One child, or a grandparent, friend or guardian
Where to open Trade-off
Bank or credit union Easiest; investments limited to their own funds
Self-directed brokerage You pick the investments — cheaper if you pick cheap funds, more work
Robo-advisor Automated, cheaper than bank funds, less choice
Group or scholarship plan Pooled with other families on a fixed schedule; dealer-sold

⚠ Before signing a group plan — six answers, in writing

Long Canadian complaint history, clustered on these.

  1. Enrolment and membership fees in dollars, charged when?
  2. If I miss a payment or stop — what is lost: fees, earnings, eligibility?
  3. Can I get my contributions back, at what cost?
  4. If my child does not finish, start, or picks a program you reject? Get the qualifying-program definition in writing.
  5. Is my child's payout guaranteed, or does it depend on how many others finish?
  6. Total lifetime cost in dollars, not percentages.

Compare against a plain bank RESP, and take the paperwork home.

What you need to open it

  • The child's SIN. No SIN, no RESP, no grant. Apply through Service Canada — for newcomer families this is the slow step.
  • Proof of the child's birth.
  • Your ID and SIN.
  • Your relationship to the child, for a family plan.

No SIN yet? Start there — carry-forward and the CLB's retroactive years both survive the wait.

Getting the money out

Holds Tax
EAP Grants + all growth Taxable to the student, on a T4A — usually little or nothing at student income. Capped at $8,000 for the first 13 consecutive weeks; no limit after, while enrolled; resets after a 12-month break
Refund of contributions What the family put in Tax free, income to nobody

In a high-earning year for the student, take more as refund of contributions and less as EAP. Agree the split with the provider before the first withdrawal.

If they do not go

Contributions come back tax free; grants are repaid. The growth has four routes:

  1. Wait. Plans stay open for years, and apprenticeships and many college programs qualify. The most-missed option — families close plans on a teenager's first answer.
  2. Move it to a sibling. Simple in a family plan, possible between individual plans within limits.
  3. Accumulated Income Payment. Take the growth yourself, taxed as your income plus an extra tax.
  4. Transfer it to your RRSP. With room and conditions met this avoids the extra AIP tax, and is usually the cheapest exit. It needs the room to exist — why the Makers tier insists on filing every year.

Educational information only, not financial or tax advice. Every indexed threshold above carries its own year — check the current one before acting. RESP rules depend on your circumstances; confirm with CRA or a qualified professional.

This page is financial education, not financial advice, and nothing on it is a recommendation of a product, a provider or an investment. Where a figure is a statutory amount it is stated as one. Rates, fees, sign-up bonuses and annually indexed income thresholds change, so they are either described without a number or labelled with the tax or benefit year they apply to. Confirm anything you are about to act on with the issuing body or the provider directly.