Things to know before choosing an RESP

Annual RESP contributions are not capped, but there is a lifetime limit of $50,000 per beneficiary.

Angela Iermieri | Financial Planner | Desjardins Group

There are two types of registered education savings plans (RESPs). Each has specific features you should be aware of before making a decision because some conditions are more restrictive than others. 

Things to remember:
  • RESP contributions cannot be deducted from the subscriber's taxable income. - Investment income is tax-sheltered.
  • Annual RESP contributions are not capped, but there is a lifetime limit of $50,000 per beneficiary.
  • The Canadian Education Savings Grant and Québec Education Savings Incentive are, however, subject to both annual and lifetime limits ($7,200 lifetime limit at the federal level and $3,600 from Quebec) 

Here's a brief overview of each type of plan.

 (also called scholarship program)
Available fromFinancial institutions and some foundationsFoundations
Contribution method
The subscriber can contribute any amount at any time, or set a fixed amount to contribute at specific intervals. The subscriber can change, stop or restart contributions at will.
The subscriber deposits to the plan for a stated period of time, according to the savings plan that the subscriber selects and the beneficiary's age.
Investment options and managementThe subscriber chooses where to invest contributions based on their investor profile.

Available investment products:
  • Savings account
  • Guaranteed investment certificates
  • Mutual funds
Products may be changed after opening the plan.
The decisions are up to the foundation managing the plan.
Beneficiary Individual plans have one beneficiary, while family plans* can cover two or more children from the same family.

The subscriber is free to change the beneficiary, e.g., if the child does not pursue postsecondary education.
The beneficiary can be changed if the plan allows it.
Educational assistance payments (EAP) to the studentThe student receives:

  • Government grants
  • Investment returns
The returns on investments of all participants of the same age group are distributed.
CapitalAll capital belongs to the subscriber, regardless of whether the student chooses to continue their studies.

The subscriber can choose to transfer the funds to the student or claim them and close the plan.
100% of the capital is returned to the subscriber when their contract comes to an end. 
FeesNo subscription or account closure fees.Each group plan has its own rules. Ask your group broker for more information and make sure you're aware of all associated costs.

 To explore investment scenarios, use the RESP calculator

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 *In a family plan, each beneficiary must: 
  • Be related to the subscriber by blood or adoption or, if the initial subscriber has died, have been related to them in their lifetime
  • Be under 21 years old when named a beneficiary or, in the case of a transfer from one family plan to another, have been the beneficiary of the former plan

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