Registered Education Savings Plan (RESP)

A Smart Way to Save for Your Family’s Future

A Registered Education Savings Plan (RESP) is a tax-sheltered plan registered with the Canada Revenue Agency (CRA) that can help families save for their children’s post-secondary education. Contributions made to an RESP grow tax free until the funds are withdrawn to pay for tuition when the beneficiary is registered at a qualifying educational program.

Investing in an RESP will give you and your family members more financial freedom when making the choices that will affect their future. By starting now, you can grow your education funds by making affordable, convenient monthly deposits. Planning today for tomorrow is the smart way to realize your family’s education goals.

Key Facts

  • Contributions:
    • Lifetime contribution limit for each beneficiary (child) is $50,000. There is no annual limit.
    • If you cannot make a contribution in any given year, you may be able to catch up in future years – up to $5,000 if carry forward room is available
    • Contributions are not tax-deductible
  • All the money in an RESP grows tax-free until withdrawn and will be taxed in the hands of the beneficiary, who will typically have little income as a student and will likely pay minimal or no tax on the withdrawal
  • You can hold a variety of investments in an RESP
  • The basic CESG provides 20 cents on every dollar you contribute, up to a maximum of $500 (20% of the first $2,500 of annual contributions per beneficiary) per year
    • $7,200 Lifetime CESG maximum per beneficiary
    • CESG paid into a Family Plan RESP may be used by any beneficiary of the RESP to a lifetime maximum of $7,200 per beneficiary
  • Additional CESG available to lower income families
  • CESG eligibility criteria:
    • Beneficiary and subscriber must have a valid SIN and be a Canadian resident
    • Contributions must be made before the end of the calendar year in which the beneficiary turns 17
    • Special rules apply to beneficiaries age 16 and 17
†Dollar amounts are updated annually based in part on the rate of inflation.


Rates
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RESP Facts
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RESP Brochure
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Government Grants Expand/Collapse

Canada Education Savings Grant (CESG)

All RESPs are eligible for Basic CESG

  • The Basic CESG provides 20 cents on every dollar you contribute, up to a maximum of $500 (20% of the first $2,500 of annual contributions per beneficiary) per year
  • If you cannot make a contribution in any given year, you can carry over unused Basic CESG. By contributing more than $2,500 in subsequent years, you can get up to $1,000 of Basic CESG per calendar year if unused CESG amounts are available
  • $7,200 Lifetime CESG maximum per beneficiary
  • CESG paid into a Family Plan RESP may be used by any beneficiary of the RESP to a lifetime maximum of $7,200 per beneficiary

Additional CESG available to lower income families

  • $600 For family income <$47,630†: $500 (Basic CESG) + $100 (an additional 20% on the first $500 of annual contributions per beneficiary)
  • $550 For family income between $47,631† and $95,259†: $500 (Basic CESG) + (an additional 10% on the first $500 of annual contributions per beneficiary)

CESG eligibility criteria:

  • Beneficiary and subscriber must have a valid SIN and be a Canadian resident Contributions must be made before the end of the calendar year in which the beneficiary turns 17
  • Special rules apply to beneficiaries age 16 and 17

For complete CESG guidelines, visit Employment and Social Development Canada.

 

Canada Learning Bond (CLB)

  • Eligibility for the CLB is based, in part, on the number of qualified children and the adjusted income of the primary caregiver
  • $500 initial bond plus $100 per eligible year up to age 15
  • No contributions required
  • $2,000 lifetime maximum per beneficiary
  • Cannot be used by other beneficiaries in a Family Plan RESP

 

Saskatchewan Advantage Grant for Education Savings (SAGES Grant)

NOTE: The Government of Saskatchewan has announced the temporary suspension of SAGES effective January 1, 2018.

Until further notice:

    • SAGES matching funds will not be provided for contributions made after December 31, 2017.
    • Retroactive SAGES will not be provided for any contributions made prior to January 1, 2018.
    • SAGES grant room will not accumulate for beneficiaries after December 31, 2017.

Subscribers are encouraged to continue to submit applications for SAGES for beneficiaries resident in Saskatchewan to ensure a smooth transition once the suspension is lifted and SAGES payments restart. Existing SAGES amounts will remain invested and available for Education Assistance Payments to eligible beneficiaries and can be transferred to your RESP.

In 2013, the Saskatchewan government passed legislation to help families save for their children’s post-secondary education. Commencing in 2013, all children under the age of 18 automatically accumulate SAGES grant room. A child does not have to reside in Saskatchewan to accumulate grant room. However, to receive SAGES payments, contributions must be made to an RESP and the beneficiary must be a resident of Saskatchewan at the time the contributions are made. The Saskatchewan government will contribute up to 10% annually, on the first $2,500, deposited into an RESP, to the end of the year in which the beneficiary attains age 17*.

      • Annual SAGES Grant maximum: $250 per beneficiary ($500 where beneficiary has unused SAGES Grant room)
      • Lifetime SAGES grant maximum: $4,500

Some restrictions apply for RESP beneficiaries aged 16 and 17

Withdrawals Expand/Collapse

There are two types of withdrawal options

  1. Educational Assistance Payment (EAP)
    • Consists of earnings or “accumulated income” plus the grants themselves
    • When withdrawn, the EAP is taxed in the hands of the beneficiary. A T4A tax slip is issued in the beneficiary’s name and must be included as income for the year that the beneficiary receives it.
    • Current proof of enrolment in a designated or certified post-secondary education program is required before a payment can be processed. 
  2. Post-Secondary Education (PSE) Withdrawal
    • Consists only of contributions (investment principal) in the RESP
    • Not taxed since contributions were made with after-tax dollars
    • Since the beneficiary is pursuing a post-secondary education, the subscriber may withdraw their contributions without repaying any grant amounts or paying any tax.

We offer a variety of smart investment options that can assist you in maximizing your RESP contributions.

Unused RESP Money Expand/Collapse



If the beneficiary does not immediately pursue a post-secondary education, the money invested in the RESP can continue to grow tax-sheltered. An RESP can remain open for 35 years.

  1. Name a new beneficiary
    • In a Family Plan, contributions, earnings and grants are shared by all beneficiaries
    • To keep the CESG, the new beneficiary must be under 21 years of age and be a brother or sister of the former beneficiary
  2. Transfer assets to another eligible RESP
    • May be able to keep the government grants
  3. Transfer the accumulated income to an RRSP*
    • Up to $50,000 of earned income can be contributed into the subscriber’s regular or spousal RRSP – provided the subscriber/spouse has sufficient RRSP contribution room
    • Grants must be returned, but the growth is kept
  4. Withdraw the earnings with an Accumulated Income Payment*
    • If there are no other eligible alternative beneficiaries, the subscriber can also elect to receive the income earned on the money contributed to the RESP in the form of an Accumulated Income Payment (AIP)
    • Grants will be returned to the government when the first AIP is made, but growth is kept
    • AIPs are taxable income for the subscriber and are subject to the usual withholding tax rates for registered plans plus 20% additional tax (varies by province)
    • The RESP account has been in existence for at least 10 years and the beneficiary is at least 21 years of age and is not pursuing post-secondary education
    • AIPs cannot be rolled into the beneficiary’s RRSP
  5. Transfer the earnings to a Registered Disability Savings Plan (RDSP)
    • Must have a beneficiary who is eligible for the Disability Tax Credit
    • Contributions must be made before the end of the year in which the beneficiary turns 59
    • The rollover is taxable at the time the disability assistance payment is made and cannot not cause total contributions to exceed $200,000
    • In addition, one of the following conditions must be met:
      • The beneficiary has a severe and prolonged mental impairment that can reasonably be expected to prevent him/her from pursuing post-secondary education or
      • The RESP has been in existence for more than 35 years
  6. Withdraw the contributions
    • The money that was contributed to the RESP over the lifetime of the plan may be withdrawn and returned to the subscriber.
    • All grant incentives received that remain within the account at the time of the withdrawal will be returned to the federal and/or provincial governments.
    • Contributions withdrawn are not subject to any additional tax.
  7. Donate the earnings to an educational institution
    • Some RESPs allows for the amount of earnings remaining in the RESP (i.e., whatever remains after eligible amounts have been transferred or converted) to be paid to a designated educational institution in Canada provided that:
      • The beneficiary is not eligible for an Education Assistance Payment (EAP)
      • Incentive(s) have been repaid, as required
      • The subscriber does not qualify for an AIP
    • All grant incentives received that remain within the account at the time of the withdrawal will be returned to the federal and/or provincial governments.
    • A payment to a Canadian designated educational institution would be a gift and not a donation so a tax receipt will not be issued to the subscriber or to the beneficiary

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