If everything goes the way you hope, the beneficiary of your RESP will go on to higher education after high school, using money from your Registered Education Savings Plan (RESP).
However, sometimes things don’t work out. Here are just a few of the things that can happen down the road:
- You might lose your job and find out you can’t make your payments for a while
- You may change your mind and want to leave the plan
- Your child may want to work instead of going to college
- Your child may go to school for one year, and then want time off before they go back.
If this happens, you will likely have some choices about what happens to your RESP savings. It depends on the rules for your plan. The rules for group scholarship plans are different from many other RESPs.
What can I do with my RESP savings if plans change?
This chart provides a brief summary of your options. The choice you make will depend mostly on the reason your plans have changed.
| Options | Can you do this with RESPs from a financial institution? | Can you do this with individual and family scholarship plans? | Can you do this with group scholarship plans? |
| Close the account and: · Get back your contributions · Get back the money you made investing | Yes (but there may be fees) Yes (if the plan is open for 10 years and the beneficiaries are older than 21) | Yes (but there will be fees) Yes (if the plan is open for 10 years and the beneficiaries are older than 21) | Yes (but there will be fees) No, but you may be able to transfer the money you've made investing into an individual or family plan |
| Keep the plan open and hope things change (most plans can stay open for up to 26 years) | Yes | Yes | Sometimes |
| Transfer all of the money to a sibling under age 21 | Yes (but there will be fees) | Yes (but there will be fees) | Yes (but there will be fees) |
| Transfer all of the money to another child in a family plan (up to the maximum allowed for that child) | Yes | Yes | Does not apply |
Remember: Rules vary from RESP to RESP
Find out what options you will have if your child does not go on to higher education after high school. Also, have a plan for what would happen if you can’t make your payments for some reason. If there’s a chance that either of these things could happen, and you are considering a scholarship plan, make sure you understand what your options are with the plan you select.
Content in this section is provided in partnership with the Investor Education Fund, a non-profit organization promoting financial literacy to Canadians. To find out more go to GetSmarterAboutMoney.ca.
