Saving for Your Child’s Education in Canada: RESP Basics for Newcomers

If you’re new to Canada, saving for your child’s education could be one of the financial goals you’re considering. A Registered Education Savings Plan (RESP) is one option that helps save for eligible post-secondary education.

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A Registered Education Savings Plan (RESP) is an account registered with the Government of Canada. It is designed for saving toward a beneficiary’s future post-secondary education.

Here’s a look at how RESPs work, the types of plans available and some key points to consider when getting started.

RESP Basics

The person who opens the RESP is known as the subscriber. This can be a parent, guardian, grandparent, other relative or friend. Both the subscriber and beneficiary generally require Social Insurance Numbers (SINs). The beneficiary must be a Canadian Resident in order to be eligible and to receive and use grants.

Choosing an RESP

There are three main types of RESPs. Each works a little differently.

• Individual RESP: This plan has one beneficiary. Anyone can open and contribute to an individual RESP, subject to eligibility requirements.
• Family RESP: This plan can have more than one beneficiary. Each beneficiary must be related by blood or adoption to the subscriber.^[1] Contributions, investment earnings and some government education savings incentives can be shared among the beneficiaries.
• Group RESP: These plans are offered by certain RESP providers and may have their own rules. For example, they may require contributions to follow a set schedule.

The type of RESP you choose could depend on three things: a) who you’re saving for, b) how you want to contribute and c) the rules of the plan.

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Adding and Using RESP Savings

There is no annual RESP contribution limit. However, there is a lifetime contribution limit of $50,000 for each beneficiary. RESP contributions are not tax-deductible. Investment earnings may grow tax-deferred while they remain in the plan.

Paying for Post-Secondary Education

When the beneficiary is eligible to receive RESP funds for post-secondary education, there are two main types of withdrawals:

• Post-Secondary Education (PSE) withdrawals come from the contributions made to the RESP. Since these contributions were made with after-tax dollars, they can often be withdrawn tax-free.
• Educational Assistance Payments (EAPs) include investment earnings and eligible government education savings incentives in the RESP. EAPs are considered taxable income for the student. Depending on the student’s income and available tax credits, the amount of tax they pay may be low or zero.

Different rules and limits apply to RESP withdrawals, so it is useful to understand the requirements before taking money from the plan.

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When Education Plans Change

If the child does not pursue post-secondary education, you have other options. Depending on the plan and your circumstances, you may be able to keep the RESP open, change the beneficiary or withdraw your original contributions.

If the beneficiary does not pursue post-secondary education and the subscriber decides to close the RESP and withdraw the funds, special rules apply to the withdrawal of any investment earnings in the plan, and the government education savings incentives may need to be returned.

Reviewing the available options and the terms of the plan can help the subscriber decide what to do with the RESP if the beneficiary’s education plans change.

Government Incentives for RESP Savings

Depending on the beneficiary's eligibility, government education savings incentives may be added to an RESP. Some are based on contributions, while others may be available based on family income.

Canada Education Savings Grant (CESG)

The Canada Education Savings Grant (CESG) generally adds 20% on the first $2,500 contributed to an RESP each year. This means a beneficiary may receive up to $500 per year, to a lifetime maximum of $7,200. Unused grant room may be available from previous years, subject to program rules.

Once you have applied for the CESG, your RESP provider will request the grant when eligible contributions are made. You can also learn more about CESG eligibility and how the grant works through TD.

Depending on family income, a beneficiary could also qualify for an additional CESG on  the first $500 of annual contributions made each year.

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Canada Learning Bond (CLB)

The Canada Learning Bond (CLB) is available to eligible beneficiaries from lower-income families.  Contributions to an RESP are not required to receive the CLB.

An RESP must be opened for the eligible beneficiary and an application for the CLB must be submitted. Eligible beneficiaries receive an initial payment followed by additional amounts for each subsequent year of eligibility, up to age 15. The lifetime maximum is $2,000.

Eligible beneficiaries aged 18 to 20 can apply for previously unclaimed CLB amounts on their own until the day before they turn 21.

Provincial Education Savings Incentives

Some provinces also offer education savings incentives. Programs are currently available in British Columbia and Quebec, subject to eligibility requirements.

Your RESP provider or provincial government resources provide more information about programs that could apply to you.

Why RESPs Can Be Especially Helpful for Newcomers

RESPs can support newcomers who want a long-term approach to planning for their children’s education. They offer several advantages that can 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 is useful if your income changes over time.
• ✔ Access to government incentives — CESG and CLB can increase your savings without requiring large contributions.
• ✔ Credit history is not required— as long as you have the required identification, Social Insurance Numbers, and Canadian Residency Status for tax purposes, you could open an RESP at a bank, credit union, or online investment platform.

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

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How an RESP Could Fit into Your Plans in Canada

If you’re new to Canada, an RESP can be one option to consider as you plan for your child’s future education. Here are some features to know:

• ✔ Tax-deferred growth: Investment earnings are not taxed while they remain in the RESP. Tax may apply when certain funds are withdrawn.
• ✔ Choice in how you contribute: You can decide how much and how often to contribute, subject to the RESP lifetime contribution limit and the terms of your plan.
• ✔ Government education savings incentives: Eligible beneficiaries could receive the CESG,CLB, and provincial grants. Eligibility and amounts depend on the program.
• ✔ No credit history requirement: Opening an RESP does not generally depend on having an established Canadian credit history. You will need to meet the plan’s identification and eligibility requirements.

You don’t necessarily need to make large contributions to get started. Saving smaller amounts over time can help you work toward your child’s future education costs.

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Ready to Open an RESP?

To open an RESP, the beneficiary must be a Canadian resident. You will also need Social Insurance Numbers (SINs) for both the subscriber and beneficiary. RESPs are available through many financial institutions and investment providers.

Explore Your RESP Options

TD offers different ways to open and manage an RESP. You can choose to work with a TD advisor or use TD Direct Investing if you prefer to invest on your own.

Consider How to Invest

Depending on the provider and type of account, an RESP holds investments such as cash, Guaranteed Investment Certificates (GICs), mutual funds and other qualified investments.

When considering your options, think about your financial goals, how long you have before the beneficiary may need the money and how much investment risk you are comfortable with.

Check In on Your Plan

Your savings needs can change over time. Consider reviewing your RESP periodically or when your financial situation changes. You may want to adjust your contributions or investment choices as your goals and circumstances evolve.

TD also offers resources that can help you learn more about RESP saving and investing options.

Planning for Education in Canada

For newcomers, learning about RESPs could be one part of getting familiar with the Canadian financial system. An RESP provides a way to save for a child’s future education while accessing government education savings incentives, if eligible.

Getting started could be simpler than many newcomers expect. Consider what you could be able to save, then begin to explore the RESP options available to you and which government incentives your child may qualify for. Even a modest contribution can be a place to begin.

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Why Choose TD?

More than 160 years of helping Canadians:

TD has a proud history of delivering financial solutions to Canadians for more than 160 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.

With over a thousand branches, and the ability to also serve you in more than 80 different languages, TD has become one of the largest and most trusted banks in Canada, now serving 16 million Canadians.

TD offers online support and resources of interest to newcomers on topics such as banking basics, moving to Canada, credit score essentials, and more. TD is open longer hours for your convenience and has thousands of ATMs across Canada to help you take care of your everyday banking needs quickly and easily.

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SOURCES IN CORRECT FORMATTING

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 August 10, 2026).

TD. Registered Education Savings Plans (RESPs).
https://www.td.com/ca/en/personal-banking/personal-investing/products/registered-plans/resp (accessed August 10, 2026).

TD. Individual or Family RESP.
https://www.td.com/ca/en/personal-banking/personal-investing/learn/individual-or-family-resp (accessed August 10, 2026).

TD Direct Investing. How to Invest in an RESP.
https://www.td.com/ca/en/investing/direct-investing/articles/how-to-invest-in-resp (accessed August 10, 2026).

Government of Canada. Registered Education Savings Plans and Related Benefits.
https://www.canada.ca/en/services/benefits/education/education-savings.html (accessed August 10, 2026).

TD. Canada Education Savings Grant (CESG).
https://td.intelliresponse.com/cbaw/index.jsp?requestType=NormalRequest&source=3&id=3194 (accessed August 10, 2026).

TD. RESP Contribution Limit Rules in Canada.
https://www.td.com/ca/en/personal-banking/personal-investing/learn/resp-contribution-limit-rules-canada (accessed August 10, 2026).

TD Personal Banking. Investing with TD.
https://www.td.com/ca/en/personal-banking/personal-investing/special-investing-offer (accessed August 10, 2026).

[1] Under the Income Tax Act, a blood relationship is that of a parent and child (or grandchild or great-grandchild), or that of a brother and sister. Nieces, nephews, aunts, uncles and cousins are not considered blood relatives.