An RESP, or Registered Education Savings Plan, is a Canadian registered investment account designed to help parents save for a child’s post-secondary education. Contributions grow tax-sheltered, and government grants can be added through the Canada Education Savings Grant.

How much does the government contribute to an RESP?

The Canada Education Savings Grant generally adds 20% on the first $2,500 contributed each year, up to $500 annually per child. The lifetime CESG maximum is $7,200 per eligible child.

What is the RESP contribution limit in Canada?

The lifetime RESP contribution limit is $50,000 per beneficiary. There is no annual contribution limit, but only a certain amount each year qualifies for the basic Canada Education Savings Grant.

What is the difference between an individual RESP and a family RESP?

An individual RESP has one beneficiary, while a family RESP can include multiple related beneficiaries, such as siblings. A family RESP can be more flexible because education savings may be shared among children if one child uses less or does not attend post-secondary school.

Can you catch up on missed RESP grants?

Yes. Unused CESG room can be carried forward. This may allow a family to contribute more in a later year and receive more than the standard $500 annual grant, subject to RESP and CESG rules.

What happens if my child does not go to college or university?

RESPs can be used for many types of qualifying post-secondary education, including college, university, trade schools and apprenticeships. If the funds are not used for education, your original contributions can generally be withdrawn tax-free, government grants are returned, and investment growth may be transferable to an RRSP if conditions are met.

31 May 2026 5 min read Advice

RESPs Explained - A Primer for Canadian Parents

I was at a party recently where one of the guests was pitching "children's investment packages" to every parent in the room. Big promises, fancy brochures, lots of jargon. I smiled, nodded, and thought - I really need to write a post about RESPs so fewer people fall for this.

If you have kids and you're not using a Registered Education Savings Plan (RESP), you are leaving free government money on the table. That's not hyperbole, the government literally deposits cash into your account. Here's how it all works.

What Is an RESP?

An RESP is a registered investment account designed to help parents save for their children's post-secondary education. The government's incentive to get you going is called the Canada Education Savings Grant (CESG). The government contributes 20% on the first $2,500 you put in each year. Deposit $2,500, get $500 from the government for free. The only catch is you have to open the account and actually use it.

The lifetime contribution limit is $50,000 per child, and the government will contribute a maximum of $7,200 over the life of the account. Growth inside the account is tax-sheltered, and when your child withdraws funds for school, the income is taxed in their hands, not yours. Since most students have little to no income, they'll typically pay little to no tax on it. I greatly benefitted from this for the first couple of years of school when the money ran out (engineering tuition and living in dorms gets expensive!).

Individual vs. Family RESP

There are two main types - Individual and Family.

Individual RESPs are exactly what they sound like - one account, one child. Simple to open, simple to use.

Family RESPs pool contributions across multiple siblings. There's a bit of extra paperwork when opening the account and again when withdrawals start, but that's it. The big advantage is if one kid ends up skipping post-secondary, the funds can be redirected to a sibling who does go.

If you have more than one child, or think you might, go with a Family RESP. It gives you flexibility without adding meaningful complexity. We set up a Family RESP when our first was born. When our second arrived, I filled out one extra form with their name and SIN. That was the entire process.

How to Open One

Opening an RESP is no more complicated than opening a TFSA or an RRSP:

Pick a financial institution. We use Questrade, and I'd recommend any reputable self-directed broker.
Apply and decide upfront - Individual or Family?
Link it to your bank account.
Start contributing and choose your investments.
Repeat until your child is heading off to school.

One firm warning - do not use the predatory RESP companies that cold-call new parents or get referred to you through a friend who "sells investments." They lock you into rigid plans, charge high fees, and use complex language to make you feel like you couldn't possibly manage this yourself. You can. Questrade, Wealthsimple, and similar platforms are all you need.

What to Invest In

Just like a TFSA or RRSP, the RESP holds whatever investments you choose. The basic rule of thumb - be aggressive early, dial it back as your child gets closer to needing the money.

When our first was born, we started with VEQT - all-equity, maximum growth. When our second arrived, we moved to VGRO, a slightly more balanced mix. Now that our oldest is approaching nine, I've started buying XQB (a short-term bond ETF) with dividends to gradually reduce risk. By the time they're 17 or 18, you want minimal equity exposure. The last thing you need is a market correction wiping out years of growth right before tuition is due.

If you're not comfortable picking your own investments, Questrade and Wealthsimple will do it automatically based on your timeline. That's a perfectly fine option.

Starting Late? There's a Catch-Up Provision

If you didn't open an RESP the day your child was born, don't panic - you can catch up. The government allows you to carry forward unused CESG room and claim it one year at a time. That means if you missed a year, you can contribute $5,000 the following year and collect $1,000 in grants instead of $500. You can only carry forward one year at a time, so the sooner you start, the less you leave behind.

What If My Kid Doesn't Go to School?

First, "post-secondary" is broader than most people think. It includes trade schools, apprenticeships, college programs, and more. It is not just a four-year university degree. Accounts stay open for up to 35 years, so there's no rush to decide. Oh, and you can continue contributing for up to 31 years.

If no one ends up using the funds at all, here's what happens:

The government grants (CESG) go back to the government.
You can transfer up to $50,000 of investment growth to your RRSP, if you have the contribution room and meet the other conditions.
The remaining growth moves to a non-registered account and you pay tax on it.

The principal you contributed comes back to you tax-free. The worst-case scenario is still pretty manageable.

A Few Things I'd Tell Every New Parent

Open it the moment your child is born. Time-in-market matters here just as much as anywhere else.
If you can front-load it, do. When our first was born, we knew my wife was going to stay home, so we deposited $10,000 upfront. That one decision has compounded into something meaningful. That account is now over $35,000 on roughly $17,000 contributed over eight years.
Automate your contributions. Set up a regular transfer and forget about it.
Use a self-directed account if you're comfortable, Wealthsimple if you're not. Either way, stay away from the guys at the party with the brochures.

The RESP is genuinely one of the better financial tools available to Canadian parents. Free government money, tax-sheltered growth, and a 35-year window. There's no good reason not to use it.