Savings / RESP
Registered Education Savings Plan
The RESP is the only registered account where the federal government adds money to what you contribute. For families planning to help with post-secondary costs, that grant is very difficult to replicate anywhere else.
How an RESP works
You contribute on behalf of a beneficiary, usually your child or grandchild. Contributions are not tax-deductible, but they attract the Canada Education Savings Grant, in which the federal government matches a percentage of what you contribute each year up to annual and lifetime maximums.
Additional grant amounts and the Canada Learning Bond may be available to families in lower income ranges, and some provinces offer their own incentives. Eligibility and amounts are set by government and change over time, so we confirm current figures directly rather than publishing them here.
Investments grow tax-deferred inside the plan. When the beneficiary enrols in a qualifying program, withdrawals of grant money and growth are taxed in the student’s hands, typically at a very low or nil rate, while your original contributions come back to you tax-free.
Family plans allow multiple related beneficiaries to share one plan, which gives you flexibility if one child pursues post-secondary education and another does not. Individual plans cover a single beneficiary and can be opened for anyone.
Who it tends to suit
- Parents of children of any age, including newborns
- Grandparents who want to contribute toward education without complicating their estate
- Families with more than one child, who benefit from the flexibility of a family plan
- Households that may qualify for additional grant amounts or the Canada Learning Bond
- Anyone starting late who wants to know whether catch-up grant room is still available
What it can do for you
- Federal grant money is added to your contributions, a direct boost no other registered account offers.
- Growth accumulates tax-deferred inside the plan rather than being taxed annually.
- Withdrawals of grant and growth are taxed to the student, who usually has little or no other income.
- Unused grant room can generally be carried forward, so a later start does not necessarily forfeit everything.
- Family plans let you redirect funds among siblings if plans change.
Start early, contribute steadily, and let the grant do part of the work.
Before you decide
Things to weigh carefully
- What if my child doesn’t go to post-secondary school?
- Grant money must generally be returned to the government. Your contributions come back to you, and accumulated growth may be transferable to your RRSP if you have room and the plan meets the conditions. Otherwise it is withdrawn as taxable income with an additional tax. A family plan or naming an alternate beneficiary can soften this.
- What counts as a qualifying program?
- A wide range of post-secondary options qualify, including many college, university, trade, and apprenticeship programs, and some programs outside Canada. It is broader than most parents expect, so it is worth checking before assuming a path does not qualify.
- How should the money be invested?
- Time horizon drives it. A newborn has close to two decades; a fifteen-year-old has three or four years. Plans commonly shift toward lower-volatility holdings as enrolment approaches so the funds are there when tuition is due.
- Can grandparents open a plan?
- Yes, though coordinating with the parents matters. Multiple plans for the same child share the same lifetime contribution and grant limits, and exceeding them can create penalties. A quick conversation between family members prevents this.
Make sure you’re capturing the full grant
We’ll check whether there’s unused grant room to catch up on and set a contribution rhythm that fits your budget.