You can start putting money into a child's RESP as soon as they are born. Unlike an RRSP, you can't deduct RESP contributions from your taxes.
How it works
For each child or beneficiary, there is a lifetime limit of $50,000 in total contributions:
This limit does not include any government grant money.
If you contribute more than the limit, you may have to pay tax on the excess amount.
After 31 years, you can no longer make contributions. Specified plan rules allow beneficiaries eligible for the disability tax credit to make contributions to their plan up to the end of the year that includes the plan’s 35th anniversary.
Use this RESP calculator to figure out how much you need to save each year for your child's education.
Individual and family plans:
You can usually choose how much and how often to put money in.
There are no annual limits.
You must make regular contributions according to a set schedule for a fixed amount of time.
If you miss a contribution, you may have to pay a penalty or even leave the plan.
Learn more about group plans.
Maximize your grants: To get the full Canada Education Savings Grant of $500 in a year, you have to contribute $2,500 to the RESP.
Transferring money between RESPs
You may want to transfer money from 1 RESP to another, for example, if you're changing financial institutions or consolidating several RESP accounts for the same beneficiary into a single account.
There are no tax penalties if:
both plans have the same beneficiary, or
the beneficiaries of both plans are siblings who are under the age of 21.
Check with your RESP provider to find out if the terms of your plan allow these types of transfers and if there are any fees. Group plans may have more restrictive rules for transfers.
Understand your plan's rules and penalties for transferring money from one RESP to another.
Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca