RESP (Registered Education Savings Plan)


A good post-secondary education can be the key to unlocking life‘s opportunities. Over 90% of parents with children up to the age of five expect them to attend a post-secondary institution. However, as the cost of living increases over time, so do education expenses at post-secondary institutions. In fact, in 15 to 20 years, the estimated cost of a four-year education away from home may be between $100,000 – $200,000.

Who can open an RESP?

Anyone can open an RESP account for a child—parents, guardians, grandparents, other relatives or friends.

While you can open a plan for a child, you can also name yourself or another adult as the beneficiary.

An RESP allows adults to earn interest on their RESP tax-free.

RESPs and bank accounts

You can open an RESP without having a bank account.

Period that an RESP can stay open

You can make contributions into an RESP until 31 years after you first opened it. After that time, however, you can transfer savings from other RESPs into a single plan. You would then have until the end of the 35th year after the plan was first opened to use the funds before the RESP expires (unless otherwise specified in the terms for your plan).

What happens to savings in an RESP when it closes/expires

Any savings that remain in your RESP when it closes will be handled as follows:

  • money received from either the Canada Education Savings Grant (CESG) or the Canada Learning Bond (CLB) will be returned to the Government of Canada; and
  • any personal savings in the account will be returned to the person who opened the plan.

The interest earned on both the personal savings as well as any government grants or bonds will be returned to you if any of the following apply:

  • all children named in the plan are at least 21 years old and are not eligible for an Educational Assistance Payment;
  • the subscriber is a Canadian resident; and
  • the RESP was opened at least 10 years ago.

In this case, the money withdrawn is called an Accumulated Income Payment. When withdrawn, the money will be taxed at your regular income tax rate, plus an additional 20 percent. You may also transfer it into your Registered Retirement Savings Plan (RRSP) or your spouse’s RRSP.

When a beneficiary does not continue their education after high school

If the child chooses not to continue their education after high school, you can wait a while to see if they change their mind. RESP accounts can stay open for up to 36 years. If you are sure the beneficiary will not be using the money in the future, you can transfer the money from one RESP to another.

Yearly and lifetime RESP contribution limits

From 2007 to present: