Taxes & Accounts

RESPs: Grants come with rules

An RESP can attract government education savings grants, but contributions, grants and withdrawals each follow different rules.

7 min

RESPs

An RESP is an education savings account with special rules.

The account can hold savings and investments for a beneficiary's post-secondary education.

RESP contributions are not tax-deductible.

Putting money into an RESP does not create an income-tax deduction for the contributor.

Contributions can attract a federal grant.

Basic grant rate20%

Contribution for full basic annual grant$2,500

Basic annual grant$500

Lifetime CESG maximum$7,200

Some families may qualify for additional CESG.

The additional amount depends on family income and current program rules.

RESP contributions also have a lifetime limit.

Annual RESP contribution limitNone

Lifetime contribution limit$50,000

Limit appliesPer beneficiary

Government grantsNot counted toward that contribution limit

The contribution and the grant are not the same pool of money.

Keeping those pieces separate makes the withdrawal rules easier to understand.

Money can leave an RESP in different ways.

Contributions

The original contributions can generally be returned to the subscriber under the RESP rules.

Educational assistance payments

EAPs can include government grants and accumulated investment earnings paid to the beneficiary.

EAPs are generally taxable to the student beneficiary.

Students often have relatively low income, but the actual tax result depends on the beneficiary's circumstances.

The beneficiary must be eligible for the education payment.

RESP providers require proof of enrolment in a qualifying or specified educational program before making EAPs.

Grant eligibility has age-related rules too.

Waiting until the beneficiary is older to start contributing can affect whether future contributions qualify for the CESG.

An RESP decision has several layers.

01Who the beneficiary is02How much is contributed03Which grants the beneficiary qualifies for04What the account is invested in05When and how money will eventually be withdrawn

The RESP is the account. The investments inside still matter.

Like other registered accounts, the RESP's tax and grant rules do not determine how the investments themselves will perform.

Remember this

The grant is valuable because of the rules, not despite them.

Understand the contribution, grant and withdrawal pieces separately before treating an RESP as one simple bucket.

Lesson complete

Reviewed 2026-08-18

Sources

Government of CanadaCanada Education Savings Grant ↗Canada Revenue AgencyRegistered Education Savings Plans contributions ↗Canada Revenue AgencyRegistered Education Savings Plans ↗

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