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RESP — Registered Education Savings Plan: complete guide 2026
The RESP, combined with government grants, is one of the most advantageous savings vehicles in Canada. No other vehicle offers an immediate return of 30–60% in the form of grants.
How It Works and Plan Types
The RESP allows savings for a child's post-secondary education. Contributions are not deductible, but growth is tax-sheltered and government grants are added to the plan.
Two types of plans: • Individual plan: one beneficiary only. More flexible for changing the beneficiary. • Family plan: multiple beneficiaries (related by blood or adoption). Funds can be shared among beneficiaries according to their needs.
The lifetime contribution limit is $50,000 per beneficiary. There is no annual limit (but grants are calculated annually).
CESG and QESI
The basic Canada Education Savings Grant (CESG) equals 20% of annual contributions, up to a maximum of $500 per year (on a $2,500 contribution). Lifetime maximum: $7,200.
The additional CESG adds 10–20% depending on family income.
In Quebec, the basic Quebec Education Savings Incentive (QESI) adds 10% of annual contributions, up to $250 per year. Lifetime maximum: $3,600.
Total grants for a Quebec resident: up to $750 per year in grants on a $2,500 contribution. That is an immediate return of 30%.
Withdrawal Rules (Educational Assistance Payments)
Educational Assistance Payments (EAPs) include grants and accumulated investment income. They are taxable in the student's hands (who typically has little income).
The subscriber's contributions are returned tax-free (they were not deductible at contribution).
If the child does not pursue education: • Grants must be returned to the governments • Contributions are returned to the subscriber tax-free • Investment income can be transferred to the subscriber's RRSP (up to $50,000 if room is available) • Otherwise, investment income is withdrawn and taxed plus a 20% penalty (Accumulated Income Payments — AIP)
Strategies for Advisors
Grant optimization:
• Contribute $2,500 per year to maximize the annual CESG • Open the RESP at birth to maximize the growth period • Catch up on missed years: contribute $5,000 in a single year to claim 2 years of CESG ($1,000) • The family plan is more flexible when you have multiple children
Subscriber designation considerations: • Name a successor subscriber in case of death • Consider life insurance on the subscriber to guarantee future contributions
Frequently Asked Questions
What is the RESP contribution limit?
$50,000 lifetime per beneficiary. There is no annual limit, but grants are calculated on a maximum of $2,500 per year (CESG) and $2,500 (QESI). To maximize grants, contribute $2,500/year for 18 years.
What happens if the child does not pursue post-secondary education?
Grants are returned to the government. Contributions are returned tax-free. Investment income can be transferred to an RRSP (up to $50,000 if room is available) or withdrawn with tax plus a 20% penalty. The beneficiary can also be changed.
How much CESG can be caught up in one year?
You can claim CESG for 2 years in a single year by contributing $5,000 (= $1,000 in CESG). The catch-up is limited to 1 additional year per calendar year.
Does the RESP affect student financial aid?
Educational Assistance Payments (EAPs — grants plus investment income) are considered student income in the Quebec student financial assistance calculation. Returned contributions are not included. The impact depends on the EAP amount.
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Résumé en français :Guide sur le REEE (Régime enregistré d'épargne-études). Couvre les plafonds de cotisation (50 000 $ à vie), la SCEE (20 %, max 500 $/an), l'IQEE québécois (10 %), les régimes individuels vs familiaux, les règles de retrait et les options si l'enfant ne fait pas d'études.