Registered Education Savings Plans (RESP)

Registered Education Savings Plans (RESP)


  • The subscriber of an RESP plan makes contributions for a beneficiary (usually their children or grand-children) to help save for post-secondary education.
  • Unlike the RRSP, contributions made for an RESP are not deductible
  • There is a life-time contribution limit of $50,000 per child; however, there are no limits to how much a person can contribute in a given year.
  • RESP’s generate interest income and grants which are taxed in the hands of the beneficiaries (the children)

Special Grants under RESPs

If you are saving for a child’s education, the Government of Canada provides special saving incentives only available if you have an RESP.

1. Canada Education Savings Grant (CESG)

  • This is provided to everyone who saves for education; regardless of income level
  • The government pays a grant based on the amount contributed to an RESP for the child.
  • The government will deposit the CESG directly into the child’s RESP.
  • The government will contribute 20% of your annual contributions to all  RESPs to a maximum CESG of $500 for each beneficiary; for a lifetime limit of $7,200 for each beneficiary.
  • Therefore to get the full $500 per year, must contribute $2,500 per year.
  • Some beneficiaries may qualify for additional CESG, if they are from lower income families

2. Canada Learning Bond (CLB)

  • Incentive of up to $2,000 to helpmodest-income families 
  • deposited directly into the child’s RESP.

What if the beneficiary does not end up pursuing a post-secondary education?

  • The principal amount is refunded tax free
  • The additional income earned in a RESP is taxed
  • The government takes back the CESG
  • RESP can be transferred to a sibling of the beneficiary on a tax free basis provided that the sibling receiving the RESP is under 21 years of age before the transfer is made

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