RESP: free government money for your child’s education

🔴 Advanced · Step 19 of 22 · Topic: Big Life Goals

In one sentence

An RESP is a special savings account for your child’s education after high school, and the Government of Canada adds free money to it when you save.

Words to know

RESP (Registered Education Savings Plan): a savings account for a child’s education after high school, such as college, university or a trade school. The money inside grows without tax while it stays in the plan.
Subscriber and beneficiary: the subscriber is the person who opens the RESP and puts money in, often a parent. The beneficiary is the child the money is for.
CESG (Canada Education Savings Grant): money the government adds when you contribute. “Contribute” means to put your own money into the plan.
CLB (Canada Learning Bond): extra government money for children from low-income families. You do not need to put in any money to get it.
Group plan (scholarship plan): a type of RESP sold by some companies. It has fixed payment schedules and its own rules and fees.

Step 1: Get your child’s SIN

A SIN is a Social Insurance Number. Your child needs one before the RESP provider can request government grants. The provider must have the child’s SIN when the child is added to the plan.

You can apply for a child’s SIN through Service Canada. Many parents apply soon after a baby is born, or soon after the family arrives in Canada. It is free.

Step 2: Choose where to open the RESP

Many banks, credit unions, online brokers and robo-advisors offer RESPs. Inside, you can hold savings, GICs or investments, just like other accounts in this series.

Individual plan: one child. Anyone can open one, including a grandparent or friend.
Family plan: one or more children who are related to you by blood or adoption. The money can be shared between brothers and sisters.
Group plan: sold by scholarship plan companies. See the warning in Step 5.

Ask the provider two questions: “What fees will I pay?” and “Do you apply for all the grants for me?” Most providers apply for the CESG and the CLB when you sign the forms.

Step 3: Contribute to get the CESG

The basic CESG is 20% of what you put in each year, on the first $2,500. So $2,500 a year gets the full $500 grant. The lifetime maximum CESG is $7,200 per child.

Families with lower or middle income get a bit more. This is called the additional CESG. It is paid on the first $500 you put in each year:

Adjusted family net income (2026)	Basic CESG	Additional CESG	Most per year (no catch-up)
Up to $58,523	20% on first $2,500	20% on first $500 (up to $100)	$600
$58,523 to $117,045	20% on first $2,500	10% on first $500 (up to $50)	$550
Over $117,045	20% on first $2,500	None	$500

Checked October 2026 on canada.ca. The income limits change every year.

Other rules to know:

There is no yearly limit on contributions. The lifetime limit is $50,000 per child, across all RESPs for that child. Going over costs a tax of 1% per month on the extra amount.
RESP contributions are not tax-deductible. This is different from an RRSP.
Grants stop at the end of the year the child turns 17.
For a child aged 16 or 17 to get the CESG, the RESP needs at least $2,000 in contributions by the end of the year the child turns 15, or at least $100 a year in any four years before then.

Step 4: Catch up if you started late

Many parents start late. Maybe they did not open an RESP at birth, or the family moved to Canada when the children were already in school. The good news: grant room adds up. A child who lives in Canada earns $500 of CESG room each year, even before you open an RESP.

Unused room carries forward. You can catch up, but the CESG in one year is limited to $1,000. To get $1,000, you would contribute $5,000 that year.

Canada Learning Bond: for children born in 2004 or later from low-income families. The CLB pays $500 the first year the child is eligible, plus $25 to help with costs of opening the plan. After that, it pays $100 for each year the child is still eligible, up to age 15. The most is $2,000. You do not need to contribute. A young person can still ask for it until they turn 21. The income limits are on canada.ca, or call 1-800-O-Canada.

Step 5: Check provincial grants and avoid costly plans

Some provinces add their own money:

British Columbia: the BC Training and Education Savings Grant (BCTESG) gives $1,200 once. You apply between the child’s 6th birthday and the day before their 9th birthday. The child and parent must live in B.C. No contribution is needed.
Quebec: the Quebec Education Savings Incentive (QESI) adds 10% of contributions, up to $250 a year, plus up to $50 more for lower- and middle-income families. The lifetime limit is $3,600.

Other provinces may have or start programs. Ask your RESP provider.

A warning about group (scholarship) plans: these are often sold at hospitals, at home or at community events. Read carefully before you sign:

Enrolment fees can be large. They are often taken from your first payments, and you may not get them back.
You must follow a fixed payment schedule. Missed payments can cause problems.
If you leave the plan early, you may lose fees and some of the growth.
You usually have 60 days to change your mind and cancel. After that, cancelling usually costs money.

Group plans are one option. Compare their total fees with an individual or family plan at a bank or broker before you decide.

Example

Here is a simple example. A family’s adjusted net income is under $58,523 in 2026. They put $2,500 into their child’s RESP this year.

Basic CESG: $2,500 × 20% = $500
Additional CESG: $500 × 20% = $100
Total grant this year: $500 + $100 = $600

The family put in $2,500 and the plan now holds $3,100 before any growth.

Now a catch-up example. A child was born in 2023, and the family opens an RESP in 2026. The child has unused room from earlier years. If the family contributes $5,000 this year, the CESG is $5,000 × 20% = $1,000, the yearly maximum.

To reach the $7,200 lifetime CESG at the basic rate, a family would contribute $7,200 ÷ 20% = $36,000 in total over the years.

Common mistakes

Waiting until the child is older. Room carries forward, but you can only catch up $1,000 of CESG a year, and grants stop after age 17.
Not applying for the Canada Learning Bond. Many eligible families miss this free money, even though no contribution is needed.
Signing a group plan without reading the fees and the 60-day cancellation rule.
Not filing a tax return. The government uses your tax return to check your family income for the additional CESG and the CLB.

✅ My checklist

☐ My child has a SIN.
☐ I compared fees at two or three RESP providers.
☐ I asked the provider to apply for the CESG, the CLB and any provincial grant.
☐ I set up a contribution I can keep up, even a small one.
☐ I file my tax return every year.

Next step → Step 20: Buying your first home in Canada (including the FHSA)