How RESPs work

SmartSAVER: Your Guide to RESPs

We're proud to support SmartSAVER, an online resource and application tool to help families learn about and access the Canada Learning Bond through RESPs.


Who can open an RESP?
Who can I name as a beneficiary?
How much can I contribute?
Is my child eligible for a B.C. Training & Education Savings Grant?
What is the Canada Education Savings Grant (CESG)?
How do I receive the government grant?
What is the Canada Learning Bond (CLB)?
What are my RESP investment options?
How is money withdrawn from an RESP?
What happens if my child doesn’t go to school?
Do I pay any fees to have an RESP?

Who can open an RESP?

Anyone over age 18 with a valid social insurance number can open an RESP. As the registered owner, you are then entitled to make contributions or to add or remove beneficiaries. The person who opens an RESP is known as a subscriber and can be an individual or an individual and their spouse or common-law partner.

Who can I name as a beneficiary?

In most cases, your child will be the beneficiary. But you can name yourself, your spouse or another person as a beneficiary. There is a limit of one beneficiary per plan except under a Family Plan, which provides for multiple beneficiaries. The beneficiaries of a Family Plan must be related to the subscriber(s) by blood or adoption. This means the beneficiaries must be the children, grandchildren, brother or sister of the subscriber.

How much can I contribute?

There is a lifetime contribution limit to all RESPs of $50,000 per beneficiary. There are no annual limits. These contributions are not tax deductible. The Canada Education Savings Grant of up to $7,200 is available, but is not included in calculating RESP contribution limits.

Is my child eligible for a B.C. Training & Education Savings Grant?

The B.C. government has introduced a new $1,200 one-time a Registered Education Savings Plan (RESP) grant, called the B.C. Training and Education Savings Grant. If your child was born on or after January 1, 2007, they could be eligible for a one-time $1,200 deposit to a RESP after their sixth birthday. You do not have to contribute to an RESP to get it, but you do need to open an RESP before the child turns age 7.

What is the Canada Education Savings Grant (CESG)?

The CESG provides a big boost to an RESP. It’s a grant from the Government of Canada that adds 20% to the first $2,500 of annual RESP contributions*. This means that the RESP can collect an extra $500 a year (up to a lifetime maximum of $7,200 per beneficiary) towards a child's education. Depending on family net income, the CESG can increase to 30% to 40% on the first $500 of annual RESP contributions (additional benefit is referred to as Enhanced Canada Education Savings Grant (ECESG)).

How do I receive the CESG?

Usually, your RESP administrator will automatically apply for the grant on your behalf. To qualify, your beneficiary must have a social insurance number* and be under the age of 18**.

If you skip a contribution one year or open an RESP when a beneficiary is older, you can catch up some CESG room in later years. However, the maximum CESG that can be claimed in any year is $1,000 per beneficiary.

* Applications can be obtained from Employment Insurance Offices or downloaded at this site: http://www.rhdcc-hrsdc.gc.ca/eng/home.shtml.

**Some restrictions apply for RESP beneficiaries age 16 and 17.

What is the Canada Learning Bond (CLB)?

The CLB is an additional grant meant to help modest income families. . The parent or guardian must be eligible to receive the National Child Benefit (NCB) Supplement in order to receive the CLB. You do not have to contribute to an RESP to receive a CLB, you just need to open an RESP and apply for it. The CLB provides a one-time initial grant of $500, followed by an additional $100 per year of eligibility until age 15. This means the RESP can collect up to a lifetime maximum of $2,000 per beneficiary.

What are my RESP investment options?

You can tailor your investments for capital growth, income or a balance between the two. There are no restrictions on foreign content. So you can take full advantage of the growth potential of international markets.

How is money withdrawn from an RESP?

Generally, you can make two types of withdrawals from an RESP:

1. Contribution withdrawals: As a subscriber, you can withdraw your contributions at any time, subject to the terms of the RESP. Withdrawals of contributions are tax free. The subscriber can opt to have contributions paid to the beneficiary directly for post-secondary education by requesting a Post-Secondary Educational (PSEs) payments: once the beneficiaruy begins post-secondary education.

If contributions are withdrawn before the beneficiary begins post-secondary education, any CESG grants on these funds must be returned to the federal government. But you can keep the income earned on the invested grant money.

Note: Rules for withdrawing RESP funds are made by the federal government and your RESP provider. Be careful when choosing an RESP to understand all the restrictions on your plan. Some plans, such as scholarship plans, may not allow you to withdraw your contributions.

2. Investment earning and grant withdrawals: Once a beneficiary has begun post-secondary education, they can withdraw RESP* earnings, grants and bonds to cover eligible expenses, such as:

  • tuition fees and textbooks
  • school supplies, including computers
  • room and board, and travel costs to and from home

These payments are referred to as Educational Assistance Payments (EAPs) and the beneficiary is taxed on the amount withdrawn. This may be at a very low rate, if at all.
To be eligible for EAPs, the beneficiary must be enrolled in a qualifying program that lasts at least three consecutive weeks and requires at least 10 hours per week on courses or program work. Correspondence courses may qualify. Part-time programs are eligible for EAPs where at least 12 hours per month are required. Most Canadian post-secondary institutions and programs, including correspondence courses, qualify. Certain foreign post-secondary institutions may also qualify, but these programs must be for at least 13 consecutive weeks.

What happens if the beneficiary doesn’t go to school or doesn't use all the funds?

Plans change. People change their minds. If a beneficiary decides not to pursue a post-secondary education or doesn't use all the funds, you may be able to...

  1. Transfer funds to a subscriber's RRSP
  2. Withdraw the funds**
  3. Donate the funds to a designated institution.

Do I pay any fees to have an RESP?

Yes, there is a $25 annual account fee for your RESP contracts which include term deposits and/or savings accounts.

*Withdrawals restricted to $5,000 within first 13 consecutive weeks of enrolment in educational program, or $2,500 for part-time study.

**Some restrictions and/or penalties may apply.

We can help you make smart RESP choices. To speak with an RESP expert contact us at 604-709-5955, visit your local branch or in your neighborhood.