CESG, Canada Learning Bond, family vs individual plans — everything you need to know
Projected RESP at Age 18:
A Registered Education Savings Plan (RESP) is a tax-deferred account specifically designed to save for a child's post-secondary education. Contributions are not deductible, but investment growth is tax-deferred. When the funds are withdrawn as Educational Assistance Payments (EAPs), they are taxable in the student's hands — typically at a very low rate since students have minimal other income.
The most powerful feature of the RESP is government grants that top up contributions:
The basic CESG matches 20% of the first $2,500 contributed per year — up to $500/year per beneficiary. The lifetime basic CESG limit is $7,200. Additionally, low and middle income families receive additional CESG:
| Family Net Income (2026) | Additional CESG on First $500 | Total Annual CESG (on $2,500 contrib) |
|---|---|---|
| $53,359 or less | 40% extra = $200 | Up to $700 |
| $53,360 – $106,717 | 20% extra = $100 | Up to $600 |
| Over $106,717 | No additional | Up to $500 |
CESG can be carried forward — if you miss a year's contribution, you can "catch up" on one prior year's worth of grants per year (contributing $5,000 to earn $1,000 in grants). CESG stops at age 17, with special rules for ages 16–17.
The Canada Learning Bond provides up to $2,000 in government grants to children in low-income families — with no contribution required. The CLB provides:
There is no annual RESP contribution limit — you can contribute any amount per year. However, the lifetime contribution limit is $50,000 per beneficiary. Contributions beyond $50,000 face a 1%/month penalty on the excess. Note that while there is no annual limit, CESG is only paid on the first $2,500 contributed per year.
| Feature | Individual Plan | Family Plan |
|---|---|---|
| Number of beneficiaries | One | Multiple (siblings) |
| Who can be named? | Anyone | Siblings and children related to subscriber |
| EAP flexibility | For named beneficiary only | Any named beneficiary can use EAPs |
| CESG sharing | No — specific to one child | Can be split among siblings |
| Best for | Single child or unrelated beneficiary | Multiple children — maximizes flexibility |
If the beneficiary does not pursue post-secondary education, you have several options:
RESP funds can be used for a wide range of post-secondary programs including: university, college, CEGEP, trade/vocational school, and certain foreign universities. The program must be at least 3 consecutive weeks and require at least 10 hours/week of course work or training. Part-time and distance learning programs can also qualify under certain conditions.
Earn 4.5% while you save toward your RESP annual contribution. No fees, no minimums. Code 45ET55JSYA.