What Is an RESP? Canada's Education Savings Account
The Registered Education Savings Plan (RESP) is a Canadian account for saving toward a child's post-secondary education. Its killer feature: the government adds free money on top of what you put in.
The government grant (CESG)
Through the Canada Education Savings Grant (CESG), the government matches 20% of your contributions, up to $500 per year, to a $7,200 lifetime maximum per child.
- Contributing $2,500 a year gets you the full $500 grant that year — the usual "sweet spot."
- Catch-up: if you missed a year, you can contribute up to $5,000 to collect up to $1,000 of CESG (one year of catch-up at a time).
- Lower-income families may qualify for an extra CESG (up to $100 more per year) and the Canada Learning Bond.
Contribution limits
There is no annual contribution limit, but there is a $50,000 lifetime limit per child. Grants and investment growth don't count toward that $50,000 — only your own contributions do. Over-contributing triggers a 1% monthly penalty on the excess.
How the money grows and comes out
Inside the RESP, contributions can be invested (in ETFs, funds, GICs, etc.) and grow tax-sheltered. When the child enrols in a qualifying program, withdrawals of the grants and growth — called Educational Assistance Payments — are taxed in the student's hands, usually at a very low or zero rate. Your original contributions come back tax-free.
What if the child doesn't go to school?
You have options: keep the plan open (up to 35 years), name a different beneficiary (a family plan makes this easy among siblings), or wind it down — in which case grants are returned to the government and the growth can, under conditions, be moved into your RRSP.
The RESP sits alongside the other Canadian registered accounts. See the TFSA, RRSP and FHSA, or start with how to start investing in Canada. Limits and grant rules are set by the government and can change — confirm current details before contributing.
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Frequently asked
What is an RESP?
A Registered Education Savings Plan (RESP) is a Canadian account for saving toward a child's post-secondary education. Contributions grow tax-sheltered, and the government adds grants on top through the CESG.
How much is the RESP government grant?
The Canada Education Savings Grant (CESG) matches 20% of your contributions, up to $500 per year, to a $7,200 lifetime maximum per child. Contributing $2,500 a year captures the full annual grant.
What is the RESP contribution limit?
There's no annual limit, but a $50,000 lifetime limit per child. Grants and investment growth don't count toward it — only your own contributions do. Over-contributing is penalized 1% a month on the excess.
What happens to an RESP if the child doesn't go to school?
You can keep it open (up to 35 years), switch the beneficiary (easy in a family plan), or close it — grants are returned to the government and, under conditions, the growth can be moved to your RRSP. Your own contributions always come back tax-free.
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