RESP Explained: What It Is and How to Open One in Canada (For Yourself or Your Kids)

You graduated. Now your younger sibling is heading off to university, and your parents are asking if you can help them figure out this RESP thing. Or maybe you’re the one considering going back to school in a few years and someone mentioned you could open one for yourself. Either way, RESPs are one of those registered accounts that Canadians constantly hear about but rarely fully understand — which is a shame, because the government actually hands out free money through one. Whether you’re opening it for a newborn, a ten-year-old, or yourself, the mechanics are simpler than they sound. This guide breaks it all down without the financial jargon.

Quick answer: An RESP (Registered Education Savings Plan) is a government-registered savings account for post-secondary education. Contributions grow tax-free, and the government adds up to $500 per year in free grant money (up to a lifetime maximum of $7,200 per child). You can open one for your child, a family member’s child, or yourself if you plan to go back to school.

What Is an RESP and How Does It Actually Work?

An RESP is a registered account designed specifically to save for post-secondary education. You — the subscriber — put money in for a beneficiary, who is whoever will eventually use the funds for school. Contributions aren’t tax-deductible (unlike an RRSP), but the money grows tax-free inside the account. The real advantage is the Canada Education Savings Grant (CESG): the federal government automatically adds 20% on the first $2,500 you contribute each year, up to $500 per year. Over the years leading up to a child’s 18th birthday, that can add up to $7,200 in free money before investment returns. When it comes time to use the funds, Educational Assistance Payments (EAPs) — which include the grants and investment income — are taxed in the student’s hands, not yours. Since most students have low income while in school, that tax hit is usually close to zero. Compound growth does the heavy lifting over time, and the government grant turbocharges it from the start.

What Types of RESPs Are There in Canada?

Three main types exist: individual, family, and group. An individual plan has one subscriber and one beneficiary — the most flexible option, and the right choice if you’re opening one for yourself or a single child. A family plan lets you name multiple beneficiaries who are related by blood or adoption; unused funds can be shared between siblings if one doesn’t end up going to school. A group plan (offered by scholarship plan dealers) pools contributions with other families and often comes with strict rules, limited flexibility, and higher fees — most financial advisors steer people away from these. For almost everyone, either an individual or family plan opened at a bank, credit union, or investment platform like Wealthsimple or Questrade is the better path. These give you control over how the money is invested and no lock-in rules.

Quick tip: If you have two kids, open a family RESP instead of two separate individual plans — unused grant money from one child can be redirected to the other if one doesn’t end up pursuing post-secondary education.

How Does the CESG Work and Who Qualifies?

The Canada Education Savings Grant is the main reason RESPs outperform regular savings accounts for education costs. The government adds 20% on the first $2,500 you contribute per year, equalling $500 per year in free money. If you miss a contribution year, you can catch up by contributing $5,000 the following year and receive $1,000 in grants — but you can only recover one missed year at a time. The CESG is available until December 31 of the year the beneficiary turns 17. Lower-income families may also qualify for the Additional CESG, which adds an extra 10–20% on the first $500 contributed annually, and the Canada Learning Bond (CLB), which deposits government money into the RESP even if the family contributes nothing. If you’re opening an RESP for yourself as an adult (18 or older), you won’t receive the CESG or CLB — but you still benefit from tax-deferred growth on your contributions, which is worth considering if you’re planning a return to school in the next few years.

How to Open an RESP in Canada: Step by Step

Opening an RESP takes about 15–30 minutes and can be done entirely online. Before you start, you’ll need the beneficiary’s Social Insurance Number (SIN) — for a newborn, apply for their SIN first at a Service Canada location or online. Then choose where to open the account. Wealthsimple offers a no-fee RESP with automatic government grant applications and simple diversified portfolios; it’s the easiest starting point for most people. Questrade lets you pick your own investments, including low-cost ETFs, with very low trading fees. Major banks also offer RESPs, though they may charge higher management fees or limit you to their in-house funds. During setup, you’ll name the beneficiary, choose individual or family plan, and link a bank account for contributions. The platform typically files for the CESG automatically — you don’t fill out a separate grant application. If you’re also thinking about other registered accounts, it’s worth understanding how an RESP fits alongside your RRSP and FHSA when planning your overall savings strategy.

Frequently Asked Questions

What is the lifetime RESP contribution limit in Canada?

The lifetime contribution limit is $50,000 per beneficiary. There’s no annual limit on contributions, but CESG grants are only paid on the first $2,500 contributed per year, so spreading contributions over multiple years maximizes the free money you receive from the government.

What happens if my child doesn’t go to school?

If the beneficiary doesn’t attend a qualifying post-secondary program, you have a few options. You can keep the plan open for up to 35 years in case they change their mind later. You can transfer the funds to another beneficiary’s RESP if they’re a sibling. You can roll the accumulated investment income (not the grants themselves) into your own RRSP if you have available contribution room. Any government grants must be repaid, and the investment income becomes taxable in your hands.

Can I open an RESP for myself if I’m planning to go back to school?

Yes — you can be both the subscriber and the beneficiary of your own RESP. However, if you’re 18 or older, you won’t receive the CESG or other government grants, since those are only available for beneficiaries who are minors. The remaining benefit is tax-deferred growth inside the account, and Educational Assistance Payments are taxed at your (likely lower) student income level when you eventually withdraw them for qualifying education.

How much should I contribute to an RESP each year?

To get the maximum CESG benefit, contribute $2,500 per year per beneficiary — that earns you the full $500 annual grant. If you missed years and want to catch up, you can contribute up to $5,000 in a single year to claim two years’ worth of grants ($1,000 total). If $2,500 per year feels like a stretch right now, even $100 a month earns you $240 per year in free grant money — still a strong return on your contribution.

Where is the best place to open an RESP in Canada?

Wealthsimple is the most popular option for beginners because it charges no account fees, handles government grant paperwork automatically, and offers simple diversified portfolios. Questrade is a strong choice if you want to self-direct investments into low-cost ETFs. Major banks like TD, RBC, and Scotiabank also offer RESPs with the convenience of in-person support, though their fees and fund choices may be less favourable.

Ready to stop reading and start practising? Finnav is a free guided money app for Canadian students and new grads. Daily 5-minute missions. No jargon. No spreadsheets.