A Newcomer’s Guide to Registered Education Savings Plans (RESPs)

Understanding the RESP: A Helpful Savings Tool for Your Child’s Future Education

Planning for a child’s post-secondary education may feel like a big step—especially when you’re new to Canada and learning the financial system. A Registered Education Savings Plan (RESP) offers a helpful way to start saving early for university, college, trade school, or other eligible programs.

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In the article below, we explain how RESPs work, the different types available, and how newcomers might use them to build toward their child’s education.

What an RESP Is

A RESP is an account registered with the Government of Canada designed to help you save for a child’s future post-secondary education. Anyone may open an RESP for a beneficiary, which includes a parent, guardian, grandparent, relative, or friend, as long as both the subscriber and the child have Social Insurance Numbers (Note: The child needs to be a resident of Canada).

RESPs differ from regular savings accounts because they hold contributions, investment earnings, and government education incentives in one place. You may choose how much to contribute and which investment options suit the beneficiary’s goals.

There are three main RESP types:

• Individual RESPs — for one beneficiary. Any adult may contribute.
• Family RESPs — for one or more children who are related by blood or adoption^[1] to the subscriber. These plans allow contributions, investment earnings, and some education incentives to be shared among beneficiaries.
• Group RESPs — managed by certain RESP providers and structured differently, often with set contribution schedules.

Understanding each RESP option may help you choose a plan that matches your family’s needs.

How Contributions, Limits, and Withdrawals Work

RESP contributions are flexible. There is no annual limit on how much you can add, although each child has a lifetime maximum of $50,000 in contributions.^[2] Your contributions are not tax-deductible, but your money can grow tax-deferred while it is in the plan.

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Withdrawals for Education Purposes

There are two types of educational withdrawals. The Post-Secondary Education (PSE) which are withdrawals of the contributions made by the subscriber or an Education Assistance Payment (EAP) which is a withdrawal of the investment earnings and the government grant portions of the RESP. Education withdrawals can be made when your child meets the eligibility criteria.

Note: Withdrawals of EAP are treated as taxable income to the student; however, most students have enough tuition and education tax credits (and a low enough income) that they will likely pay very little or no income tax as a result of RESP withdrawals. Withdrawals of your contributions to PSE are not taxed. When you contribute to an RESP, taxes have already been paid on the money you contributed directly to the RESP, meaning this money can be withdrawn tax-free.

If Your Child Does Not Attend Post-Secondary School

If your child chooses not to continue to post-secondary education, the RESP does not need to close right away. You may keep it open for many years, change the beneficiary (if the plan allows), or withdraw your original contributions. Investment earnings are handled differently depending on the situation, so understanding the rules in advance may be helpful. Knowing your options early may make it easier to plan as your child’s future becomes clearer.

Government Grants and Bonds That Support Education Savings

One of the advantages of opening an RESP is getting access to government education incentives. These programs add money directly into the RESP to support your long-term savings.

1. Canada Education Savings Grant (CESG)

The CESG adds 20% on the first $2,500 contributed each year, up to $500 annually, with a lifetime maximum of $7,200 per child.^[3] Once you've applied for CESG, the incentive is automatically requested by your RESP provider when contributions are made. TD also provides a helpful overview of CESG eligibility and how it works.

Families with lower incomes may qualify for an additional CESG, offering a higher matching rate on part of the annual contribution.

2. Canada Learning Bond (CLB)

The Canada Learning Bond supports children from lower-income families. It does not require the subscriber to contribute. All you need to do is open an RESP for an eligible beneficiary and apply for the incentive. Eligible children may receive an initial amount and additional yearly amounts up to age 15, to a maximum of $2,000.^[2]

3. Additional Programs in Your Province or Territory

Beyond federal grants, British Columbia, and Quebec offer provincial education savings incentives. These programs may add extra money to your child’s RESP. Asking your RESP provider and reviewing government resources can help you learn what is available in your area.

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Why RESPs May Be Especially Helpful for Newcomers

RESPs may support newcomers who want a long-term approach to planning for their children’s education. They offer several advantages that may be helpful while establishing a financial foundation in Canada:

• Tax-deferred growth — investment earnings grow inside the RESP without being taxed until withdrawn.
• Flexibility in contributions — you decide how much to save and when. This may be useful if your income changes over time.
• Access to government incentives — CESG and CLB may increase your savings without requiring large contributions.
• No long credit history needed — as long as you have the required identification and Social Insurance Numbers, you may open an RESP at a bank, credit union, or online investment platform.

Starting early, even with modest amounts, may help savings accumulate over time—especially when government incentives are added.

How to Get Started and Stay on Track

To open an RESP, the beneficiary must be a Canadian resident and you will need Social Insurance Numbers for both the subscriber and the child. You may open an account at a financial institution or through an online platform.

Where You Can Open an RESP

You can open an RESP at many financial institutions. TD offers several RESP options, and you may choose to work with a TD advisor or use TD Direct Investing if you prefer to manage investments on your own.

Choosing Investments for Your RESP

RESP investment options may include cash, guaranteed investment certificates (GICs), mutual funds, and other qualified investments, depending on your provider. Thinking about your financial goals, the number of years before the child begins school, and your comfort with risk may help you select investments that feel suitable.

Reviewing Your Plan Over Time

It may be helpful to review your RESP regularly, once a year, or when your financial situation changes. Adjusting contributions or investment choices along the way may help keep your plan aligned with your financial goals. TD also offers investing resources that may support you as you make these decisions.

For newcomers to Canada, an RESP may offer a flexible and supportive way to prepare for a child’s future studies. By understanding how the plan works, the types available, and the incentives that may be added along the way, families may feel more confident about planning ahead. Beginning early, even with small contributions, may make a meaningful difference over time.

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Sources:

[1] Government of Canada. Registered Education Savings Plans (RESPs). Canada Revenue Agency. https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/registered-education-savings-plans-resps.html (accessed December 2025).

[2] TD. Registered Education Savings Plans (RESPs). https://www.td.com/ca/en/personal-banking/personal-investing/products/registered-plans/resp (accessed December 2025).

[3] TD. Individual or Family RESP. https://www.td.com/ca/en/personal-banking/personal-investing/learn/individual-or-family-resp (accessed December 2025).