An RESP (Registered Education Savings Plan) helps you save for your child’s post‑secondary education through long-term planning, tax-advantaged growth, flexible contributions, and government grants.
We’ll help you do the homework by explaining:
- Why you should use an RESP to start saving early and take advantage of tax-sheltered investment growth.
- Who can open and contribute to an RESP.
- How taxes apply to an RESP.
- How to maximize an RESP with government contributions.
- How to withdraw from an RESP to pay for education.
- What happens if your child decides not to attend university or college.
Do the math: How much does an education cost?
Statistics Canada estimates that for the 2025/2026 academic year the annual tuition will come to approximately $7,750. This varies depending on the province and university, of course. Also, that number doesn’t include living expenses. When you add up tuition plus living costs, the annual total could range from $20,000 to $30,000. Visit
When you start looking at the cost of a four-year degree, including the possibility that these expenses could increase before your child graduates, the numbers can start looking a little scary.
Don’t panic. An RESP is designed to help you save up a little at a time, with tax benefits and a government boost. Let’s talk through it.
Here are the key features you need to understand: Who can open and benefit from an RESP, how to contribute, how to grow your savings, and how it’s taxed.
Who can open and benefit from an RESP
Any Canadian resident with a valid Social Insurance Number (SIN) can open an RESP. There is no minimum age or income requirement. The beneficiary of the RESP must also be a Canadian citizen or permanent resident with a valid social insurance number.
How to contribute to an RESP
You can set up an RRSP at any time and contribute a lifetime maximum of $50,000 per child over a period of 31 years. You can contribute as often as you want as long as you don’t exceed the lifetime maximum – here are some examples:
- Add money monthly over a long period, like with pre-authorized contributions.
- Make an annual contribution.
- Deposit a lump sum if you have a sudden windfall.
You can also make your child's RESP savings stretch even further with additional contributions from the Canadian government.
What investments you can hold in an RESP
The most common investment options for RESPs are fixed-income investments (like GICs, bonds, cash) and mutual funds. Other options include stocks and ETFs (Exchange-Traded funds). It’s important to have a good balance, but how you choose specific investments within an RESP will depend on several factors, like:
- How old is the child you’re saving for – this will dictate how long the funds are invested.
- Your personal risk tolerance.
Not sure how to invest? Connect with a Meridian advisor.
How taxes apply to an RESP
RESPs are tax-sheltered. This means that your contributions to an RESP are not tax-deductible, but investment growth within the plan is tax-free until withdrawal.
Extra credit: The 20% government contribution
The Canada Education Savings Grant (CESG) matches 20% on the first $2,500 of your eligible contributions each year – up to $500 per year. The lifetime maximum for the CESG is $7,200, not matter how much you continue to contribute.
Canada Learning Bond
The Canada Learning Bond (CLB) is a grant that can add up to $2,000 per child to your RESP. To qualify, the beneficiary must be born on or after January 1, 2004, and the family’s net income must meet certain requirements. Eligible beneficiaries receive an initial grant of $500 and later grants of $100 in each subsequent year. You must open an RESP to receive the CLB, but you are not required to make personal contributions in order to receive the grant.
Not sure if you’re eligible? Connect with a Meridian advisor.
Withdrawing from an RESP
Once your child has graduated high school and officially enrolled in a qualifying post-secondary educational institution, you can start to withdraw funds from your RESP to pay for their education and related expenses, including housing, food, books, tech, transportations, etc.
In order to make a withdrawal from your RESP provider, you need to provide proof of enrolment for the beneficiary. There are two types of withdrawals:
Post-Secondary Education (PSE)
A PSE is a withdrawal of the contributions made by the subscriber. You can make these withdrawals at any time, and they can be paid to the subscriber, the beneficiary, or sent directly to an educational institution.
How are PSE withdrawals taxed?
PSE withdrawals are non-taxable because they are taken from the contribution portion of the RESP, and taxes have already been paid on those funds.
Education Assistance Payment (EAP)
An EAP is a withdrawal of the earnings of and government contributions to the RESP. This can only be paid to the beneficiary, to a maximum amount of $7,200.
Which can only be paid to the beneficiary to a maximum of $7,200 among all plans. Any CESG paid over the amount $7,200 needs to be repaid to the government directly.
How are EAP withdrawals taxed?
EAP withdrawals are treated as taxable income of the beneficiary, since they come from the non-contribution portion of the RESP. The good news is that students have relatively low income, so they pay very little tax on it.
What if a child decides not to pursue post-secondary education?
If your child decides not to pursue education after high school, you have a few options:
Keep the RESP open
An RESP can remain open for 35 years, so even if your child doesn’t want to use it now they have the option to use it in the future – for college, university or a trade school.
Make sure to take a look at all the eligible educational institutions.
Transfer the RESP to another child
If you have more than one child, you can transfer the funds to a different child’s RESP. If that child is under 21, you can transfer all funds, plus government contributions, without any tax consequences. If you want to transfer the funds to a child who is over 21 you may have to pay taxes and return contributions made via Canada Educational Saving Grants (CESGs).
Transfer the RESP to an RRSP
You can transfer the earnings in the RESP to an RRSP (Registered Retirement Savings Plan), if you meet these conditions:
- The RESP needs to have been open for at least 10 years
- All beneficiaries must be over the age of 21 and not pursuing higher education and be a Canadian resident.
- You also need to have the available contribution room in your RRSP
Withdraw the money
You can withdraw the money you contributed to an RESP for non-education purposes, and any government contributions and grants will be returned to the government. You will pay taxes on the accounts earnings at this point.
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