RESP basics for parents: How RESPs work
Discover everything you need to know about Registered Education Savings Plans (RESPs) and how they can help you save for your child’s post‑secondary education. Learn about contributions, government grants and withdrawal rules, all in one place.
What is an RESP?
A Registered Education Savings Plan, or RESP, is a Canadian account designed to help save for a child’s eligible post-secondary education. It brings together contributions, potential government incentives, and investment growth over time.
How does an RESP work?
An RESP lets you save for a beneficiary’s post-secondary education. Contributions are made with after-tax dollars, investments can grow tax-deferred, and eligible government grants may be added.
When funds are withdrawn, contributions are tax-free, while government grants and investment earnings are generally taxed to the student.
Who can open an RESP?
Most adults can open an RESP for a child, another person, or themselves. This may include:
- Parents and grandparents
- Other relatives, friends, or guardians
- Spouses or co-parents acting as joint subscribers
Both the subscriber and beneficiary need a Social Insurance Number.
What do you need to open an RESP?
To open an RESP, you generally need:
- A Social Insurance Number for the subscriber
- A Social Insurance Number for the beneficiary
- An RESP provider
- Basic personal and beneficiary information
Some providers (like Embark) may allow you to open the account without contributing immediately.
Individual vs. family RESP
An individual RESP has one beneficiary, who does not need to be related to the subscriber.
A family RESP can include multiple beneficiaries related by blood or adoption, and may offer more flexibility to share certain funds among them.
RESP contribution limits
RESPs do not have an annual contribution limit, but there is a lifetime limit of $50,000 per beneficiary across all RESPs.
- Government grants have separate annual and lifetime limits.
- Contributions are not tax deductible.
- Over-contributions may be subject to tax until the excess is withdrawn.
Is it too late to start an RESP in Canada?
It is usually not too late to start an RESP, even if the beneficiary is already in high school or close to post-secondary education.
- There may be less time for investment growth.
- Fewer years may remain to receive government grants.
- Available options depend on the beneficiary’s age and contribution history.
RESP vs. TFSA vs. RRSP
RESPs, TFSAs, and RRSPs are designed for different savings goals.
- RESP: Education savings and possible government grants
- TFSA: Flexible savings with tax-free growth and withdrawals
- RRSP: Retirement savings with tax-deductible contributions
Many families use more than one account because each supports a different financial goal.
Frequently asked questions
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