One of the most fulfilling responsibilities of all is being a parent. Planning for your child’s success can be a challenge! But there are tools you can use. For example, if you want to save for your child’s post-secondary education, you can use the most advantageous savings plan in Canada: the Registered Education Savings Plan (RESP). This guide explains how the RESP works, contribution limits, grants and much more.
The Registered Education Savings Plan (RESP) is a savings account designed to finance your child’s future post-secondary education: university, college, technical school, vocational school, etc.
Like RRSPs, TFSAs and FHSAs, the RESP is a tax-advantaged education savings account that lets you invest and grow tax-free. In fact, you don’t have to pay taxes on returns (capital gains, interest or dividends) as long as the money remains in the RESP.
In addition, RESP contributions are eligible for government grants from the federal and some provincial governments. Additional grants are also available for low-income families.
An RESP is a contract between a subscriber and a promoter to make educational assistance payments (EAPs) to a beneficiary when he or she pursues a post-secondary education:
Contributions belong to the subscriber. The grants and interest accumulated in the RESP belong to the beneficiary (the child). However, the subscriber may decide to pay his or her contributions to the beneficiary, if desired.
Once the beneficiary has been accepted by and is attending an eligible post-secondary institution, the promoter pays him or her Educational Assistance Payments (EAP).
There are three types of RESP accounts: Individual RESPs, Family RESPs and Group RESPs. The most common are the Individual RESP and the Family RESP, because they have fewer constraints and (generally) lower fees. Here’s a breakdown of how the different types of RESPs work…
An individual RESP lets you save for the education of a single beneficiary. This plan is ideal for a family with just one child, or for someone who is not directly related to the beneficiary. You can open an individual RESP at a financial institution, chartered bank, credit union, trust company or insurance company. For example, with the Questrade online investment platform.
A family RESP lets you save for the education of several beneficiaries. It’s particularly advantageous if you have more than one child, as you can designate funds for several children and easily move money from one child to another (for example, if one of your children does not pursue a post-secondary education).
One condition is that the RESP subscriber must be related by blood or be the adoptive parent of the beneficiary. This includes your children, stepchildren, grandchildren and siblings.
As with the individual RESP, the family RESP can be opened at a financial institution. For example, with the online investment platform Qtrade.
Like the individual RESP, the group RESP is intended for a single child, who need not be related to you. Your contributions are pooled with several other subscribers, and are generally invested in low-risk, fixed-return investments.
The amount you receive depends on how much money is in the group account and how many children in the group will be entering post-secondary education. Note that each group RESP has its own rules and regulations. Examples of group plans are Kaleido (formerly Universitas) and Épargne CST.
While there are more conditions and restrictions with a group plan, it can be less stressful for many parents to determine an amount they want to save in the RESP and let the investments grow on autopilot.
Here are the main advantages of opening an RESP to save for your child’s post-secondary education.
Post-secondary education can be expensive. For a Canadian undergraduate student, the average cost of tuition and living expenses is $7,360 in 2024-2025. For a Canadian graduate student, the average cost is $7,662 in 2024-2025 (source).
By saving in an RESP, you’re giving your child a head start on his or her peers. They won’t have to think about student loans, and can use their training to pursue a fulfilling career. Therefore, you give them a valuable tool in their pursuit of success.
When you save for your child’s education in an RESP, you save hundreds or even thousands of dollars through tax-free returns.
Although RESP withdrawals are subject to tax, a student’s income is generally so low that he or she will pay little or no tax. For example, if a student’s income is below the basic personal amount ($16,129 in Canada and $18,571 at Quebec in 2025), he or she will pay no tax on EAPs.
This gives you the opportunity to invest in a wide range of investments. These include exchange-traded funds (ETFs), mutual funds, stocks, bonds, guaranteed investment certificates (GICs) (Tangerine GICs or EQ Bank GICs) and more.
RESP contributions are eligible for generous grants from both levels of government. These include the Canada Education Savings Grant(CESG), which provides up to $7,200, and the Quebec Education Savings Incentive(QESI), which provides up to $3,600. Additional grants are also available for low-income families, such as the Canada Learning Bond(CLB), which provides up to $2,000.
Post-secondary education is undoubtedly an excellent path to follow, but it’s not for everyone. RESPs offer excellent flexibility if you have a child who is not pursuing a post-secondary education.
In this case, you can name a new beneficiary (if you have more than one child). You can keep the RESP account open, in case your child decides to go to school later in life. As a last resort, you may decide to close the RESP, returning the grants to the government and transferring your contributions to your RRSP.
Finally, as we saw earlier, the RESP offers great flexibility in terms of investment choices.
The RESP has a lifetime lifetime contribution limit of $50,000 per beneficiary, but no annual contribution limit. However, government subsidies have annual limits and lifetime caps. To take full advantage of the government grants, you must contribute $2,500 per year to the RESP.
Tip: Contrary to popular belief, the $2,500 annual RESP contribution (to take full advantage of the grants) does not depend on the child’s date of birth. The annual contribution is calculated on a calendar-year basis (January1 to December 31). So, even if your child is born on November 15, 2024, you can still contribute $2,500 for 2024, and another $2,500 for 2025.
If you haven’t maximized your child’s RESP, you can make a catch-up contribution. However, catch-up contributions are limited to one year per calendar year.
Let’s take an example. Your child is born in 2024. You opened an RESP account and contributed only $1,000 in 2024. This year, in 2025, you can contribute $4,000 to the RESP: $2,500 for the current year (2025) and $1,500 for the catch-up year (2024). In this way, the $4,000 contribution will be fully eligible for government grants.
Excess contributions have tax consequences for the subscriber. You will have to pay a tax of 1% per month until you withdraw the additional amount from the RESP account. In addition, this tax must be paid within 90 days of the end of the year in which you made the excess contributions.
To encourage parents to save for their child’s post-secondary education in an RESP, the federal government and some provincial governments such as Quebec offer generous grants. These grants are generally calculated according to RESP contributions, and in some cases, according to household income. They are paid directly into the beneficiary’s RESP account.
The Canada Education Savings Grant(CESG) allows you to obtain a maximum of $500 per year for an RESP. The maximum lifetime CESG is $7,200. In addition, children from middle- and low-income families can obtain up to $100 in additional subsidies.
The CESG is calculated in two stages:
To be eligible for the CESG, the child must be a Canadian resident, have a social insurance number, be 17 years of age or under, and be the beneficiary of an RESP.
The Canada Learning Bond (CLB) provides low-income families with up to $2,000 for their child’s education, with no contribution required from the subscriber. It provides $500 in the first year and an additional $100 per year until the child turns 15, as long as the beneficiary is eligible.
What’s more, the CLB is retroactive. CLB amounts accumulate each year until the beneficiary turns 15. The CLB can be applied for by the primary guardian of an eligible child up to the age of 18. The child can then open an RESP and apply for the CLB until the age of 21.
Eligibility for the CLB is based on the adjusted family income of the child’s primary guardian:
To be eligible for the CLB, the child must be a Canadian resident, have a social insurance number, be the beneficiary of an RESP, be born on or after January 1, 2004, and come from a low-income family.
The Quebec Education Savings Incentive (QESI) provides a maximum of $250 per year (lifetime maximum of $3,600). In addition, children from middle- and low-income families can receive an additional amount of up to $50 per year.
The QESI is calculated in two stages:
To be eligible for the QESI, the child must reside at Quebec on December 31 of the taxation year, be under 18 years of age, have a social insurance number and be a beneficiary of an RESP.
To open a Registered Education Savings Plan, you must choose an authorized RESP promoter, such as a financial institution, chartered bank, credit union, trust company or insurance company.
Of course, you must ensure that your child has a valid social insurance number, and supporting documents such as a birth certificate.
If you decide to open a self-administered RESP account with an online broker (individual RESP or family RESP) such as Questrade or Qtrade Investissement Direct, you’ll be able to invest RESP deposits in eligible investments such as exchange-traded funds (ETFs).
Not all financial institutions offer RESPs or can apply for government grants. A list of RESP promoters who administer federal grants is available on the Government of Canada website. The list includes
However, make sure the RESP promoter also participates in the QESI tax measure. A list of RESP providers who manage the QESI is available on the Revenu Quebec website. The example that comes up regularly is Wealthsimple, which is a federally authorized provider, but not at Quebec.
Like an RRSP, TFSA or FHSAthe RESP is not an investment. Rather, it’s a savings account in which you can invest:
Contributions belong to the subscriber (usually the parents), while grants and returns belong to the beneficiary (the child). When the beneficiary is enrolled in a qualifying post-secondary institution for full- or part-time studies, the subscriber may apply for a withdrawal.
There are two types of withdrawals to finance education:
Withdrawals for post-secondary education (PSE) are not taxable, since the subscriber did not receive any tax deductions when contributing to the RESP. There is no withdrawal limit for PSE.
Withdrawals from an EAP are taxable in the child’s name. However, with the tuition tax credit and a student’s generally low income, he or she will pay little to no tax. In 2023, EAP withdrawals are limited to $8,000 for a full-time student or $4,000 for a part-time student during the first 13 weeks of study. The beneficiary can then request a full withdrawal from the RESP in the form of an EAP.
As we’ve seen in this guide, the most advantageous savings vehicle in Canada for saving for your child’s post-secondary education is the RESP. With an RESP, you can save up to $50,000 per child and obtain generous government grants. What’s more, this education savings account is an excellent opportunity to give your child a good start in life, considering the high cost of tuition and living expenses.
The Registered Education Savings Plan (RESP) is an account that allows you to save up to $50,000 for your child’s post-secondary education and obtain government grants.
To receive the full government grant, you must contribute $2,500 per year to the RESP. If necessary, you can also make a catch-up contribution per calendar year.
The 3 types of RESP accounts are : Individual RESP, Family RESP and Group RESP.
There are many advantages to contributing to an RESP, including: helping your child with the high cost of post-secondary education, tax-sheltered investment growth, generous grants and more.
Educational Assistance Payments (EAPs), made up of grants and returns, are taxable in the child’s name. Since a student’s income is generally low, the tax burden will be low, or even nil in some cases.
The RESP has a lifetime lifetime contribution limit of $50,000 per beneficiary. To receive the full government grants, you must contribute $2,500 per year to the RESP.
Savings are here:
