RESP Guide Canada — Education Savings 2025

If your parents saved in an RESP for you, here is how to access it. If you have children of your own, here is how to start one. Complete RESP guide for 2025.

What Is an RESP?

A Registered Education Savings Plan (RESP) is a tax-sheltered account designed specifically to save for a child's post-secondary education. The government supercharges RESP savings with the Canada Education Savings Grant (CESG), which adds 20% on the first $2,500 contributed per year — a free $500/year from the government. Lifetime CESG is capped at $7,200 per beneficiary.

RESPs are opened by a subscriber (usually a parent or grandparent) for a beneficiary (the student). When the student enrolls in a qualifying post-secondary program, they can start withdrawing Educational Assistance Payments (EAPs) from the RESP.

How the CESG Works

The Canada Education Savings Grant is one of the most straightforward government incentives in Canada. Contribute $2,500 to an RESP in a calendar year, and the government deposits $500 (20%) directly into the account. Miss a year? You can catch up one year at a time — up to $5,000 per year triggers $1,000 in CESG to catch up missed room, until the beneficiary turns 17.

Annual RESP Contribution	CESG Received	Total in Account
$2,500	$500 (20%)	$3,000
$5,000 (catch-up)	$1,000 (20%)	$6,000
Lifetime limit	$7,200 total CESG	$36,000 max contribution + growth

Additional CESG for Low-Income Families

Families with lower net income receive additional CESG on top of the base 20%. The Additional CESG provides 10–20% on the first $500 contributed each year, depending on income bracket. Combined with the Canada Learning Bond (CLB) — which provides up to $2,000 to eligible low-income families without requiring any contribution at all — RESPs are particularly powerful for lower-income families.

How Students Access RESP Money

Once enrolled in a qualifying post-secondary program (university, college, trade school, or certain vocational programs), the subscriber can request Educational Assistance Payments (EAPs) on your behalf. EAPs include the investment growth and government grants — and are taxable in the student's hands, not the subscriber's. Because students typically have low income, the tax on EAPs is usually minimal or zero.

The original contributions (PSE — Post-Secondary Education payments) can be withdrawn tax-free by the subscriber at any time after the student is enrolled. These represent the family's own contributions and are not taxable to either party.

RESP Withdrawal Strategy

To minimize taxes, students should request EAPs strategically. In years with higher employment income (co-op semesters), request less RESP money. In years with lower income, request more. The first $13,521 (2024 basic personal amount) of income is tax-free federally, so students with low total annual income can often withdraw significant EAPs with no tax owing.

What If the Student Does Not Attend Post-Secondary?

If a beneficiary does not pursue post-secondary education, the subscriber has options: name a sibling as new beneficiary; roll up to $50,000 of RESP growth into the subscriber's RRSP (if room is available); or close the account and repay grants to the government, with investment growth taxed in the subscriber's hands plus a 20% penalty. Having an RESP does not obligate the student to attend school.