Registered Education Savings Plan RESP

Be the world's best parents

An RESP helps you finance post-secondary studies by growing the money that you've put into a tax-sheltered environment.

RESP Features

  • Funds may be invested for the post-secondary education of the beneficiary or beneficiaries
  • Capital and income are tax-sheltered
  • Maximum of $50,000 per beneficiary for the duration of the plan
  • Available government grants:
    • Basic Canadian Education Savings Grant (Basic CESG)
    • Additional Canadian Education Savings Grant (Additional CESG)
    • Canada Learning Bond (CLB)
    • Quebec Education Savings Incentive (QESI)
    • Saskatchewan Advantage Grant for Education Savings (SAGES)
    • British Columbia Training and Education Savings Grant (BCTESG)

How does it work?

Available Plans: Choose the type of RESP that meets your needs

  Individual RESP Family RESP
Beneficiaries A single beneficiary regardless of relation to subscriber. One or more beneficiaries, who must be related to the subscriber by blood or adoption.
Age limit No age limit. The beneficiaries must be under 31 years of age.
Breakdown among beneficiaries Contributions, withdrawals and Educational Assistance
Payments apply to a single beneficiary.
Contributions are split by the subscriber among the beneficiaries.
If the child does not pursue post-secondary education A new beneficiary may be designated. The other beneficiaries can split the contributions.

Who can suscribe to an RESP?

This varies according to the type of account, but a subscriber can be a family member such as a parent, a grandparent, aunt or uncle, a friend or anyone who wishes to invest money for a child's post-secondary education.

The subscriber must:

  • be at least 18 years old
  • be a Canadian resident
  • have a social insurance number.

Also, an RESP can be signed jointly by an individual and his or her spouse1. Subscribers must give the promoter their social insurance number and the social insurance number of each of the beneficiaries.

Who benefits from the plan?

The promoter agrees to pay out educational assistance payments (EAP) to the person registered in a post-secondary course of study (the beneficiary).

For the purposes of the plan, the beneficiary must:

  • be a Canadian resident
  • have a social insurance number

Take Advantage Of the Canada Education Savings Grant (CESG)

One of the main advantages of an RESP is that you are entitled to receive the Canada Education Savings Grant (CESG). The value of this grant is 20% of the first $2,500 of annual contributions and can be up to $500 per year per beneficiary.

Also, unused grant room from previous years (until 1998, if the child was born in 1998 or before) can be used. For each child born after 1997, the total amount of money that can be granted under the CESG over the life of the plan is $7,200.

How are the payments made?

Educational assistance payments (EAP) are made to the beneficiary in keeping with thesubscriber's instructions. The maximum EAP that can be paid out before the end of the first session of full-time study (typically a period of 13 consecutive weeks) is $5,0002($2,500 for part-time studies). Thereafter, if the beneficiary needs all the investment income and the entire grant the same year to cover tuition fees, there is no limit and the entire amount may be withdrawn.

Recovering the Funds If the Beneficiary Does Not Pursue Post-Secondary Studies:
If the RESP beneficiary does not pursue post-secondary studies and if no other beneficiary is (or can be) appointed, the grants must be returned and the subscriber's contributions will be returned. Also, the subscriber may receive the income generated from the RESP in the form of an accumulated income payment, under certain conditions.

Investment options and contribution example

Investment Options

 

Start Saving Today - An Example

It's best to start investing in the years immediately following a child's birth to be able to take full advantage of government grants and to establish a solid investment strategy.

* The figures in this graph are assumptions only and are provided to illustrate the potential advantages of this product under identical conditions.

Recovering the Funds If the Beneficiary Does Not Pursue Post-Secondary Studies

If the RESP beneficiary does not pursue post-secondary studies and if no other beneficiary is (or can be) appointed, the grants must be returned and the subscriber's contributions will be returned. Also, the subscriber may receive the income generated from the RESP in the form of an accumulated income payment, under certain conditions.

Ready to join the world’s best parents?

Open an RESP account

   

1 A trust may not serve as a subscriber.
2 The amount may be higher for certain programs known to have higher tuition fees.