Registered Education Savings Plan
Registered Education Savings Plan
is a special savings
plan that can
your family or your
friends save for children's education after high school. RESPs are registered with the Government of Canada so that savings
for education can grow tax-free until the person named in the RESP
enrolls in studies after high school.
A registered education savings plan (RESP) is a contract between an
individual who is the
subscriber, and an
organization, who is the promoter. The subscriber
makes contributions to the RESP, which earns income. The subscriber
names one or more beneficiaries
and agrees to make contributions for them and the RESP promoter
agrees to pay educational assistance payments (EAPs) to the
Except for family plan, generally, there are no restrictions on who
can be the original subscriber under an RESP: a parent, grandparent, other
relative, or friend, can open an RESP for a child (beneficiary).
You and your spouse or common-law partner can be
joint subscribers under an RESP.
Benefits of your investment in an RESP
When you have an RESP,
can start saving immediately for education in the future. Many
parents wonder how much to save. They also wonder how soon they
should start. The answer is simple.
Save as much as you can
here to find out how much you will need to pay for your child's
education in the future.
By starting early,
tax-sheltered earnings on your savings can grow surprisingly
quickly. The earlier you
open RESP the longer your savings have time to grow.
The federal Government Grants:
If you are saving for a child’s education, the Government
of Canada will provide you with additional funds that are only available if you have an RESP. Click the
Education Savings Grant
and the Canada
Learning Bond to find out how to get this money.
Type of Plans - Choosing the Right RESP For You
You can choose from three general
types of plans: individual
plans, or group
Anyone can open an individual RESP and anyone can contribute to it.
This includes parents, grandparents, aunts, uncles and friends. You
can even contribute to an individual plan for yourself.
Contributions to this type of plan can be made up to December 31 of
the 31st year after the plan's creation date (ex.: for a plan
created in 2008, contributions may be made until December 31, 2039).
Click here to get information about the individual RESP plan you
can open with us.
These plans can have one or more beneficiaries. However, each
beneficiary must be connected by blood or adoption to each living
contributor, and be under 21 when named. This includes child,
grandchild, brother and sister but excludes nephew, niece,
subscriber's spouse and the subscriber. Contributions to this plan
can only be made until a beneficiary turns 31.
Click here to get information about the family RESP plan you can
open with us.
A group RESP pools the contributions of many investors.
Contributions are made according to a schedule and are used to buy
plan units. The amount and frequency of these contributions stay the
same as long as the beneficiary has not attained 18 years of age.
The date the plan matures is set at the time of enrolment and is
based on the child’s birth date. At maturity, your child shares in
the pooled earnings of investors with children the same age as
yours. If the beneficiary fails to qualify for payment, the earnings
are distributed among other beneficiaries of the same age who do
qualify. And if you drop out of the plan before it matures, you
forfeit all of your earnings to the group.
Call us at 416-493-0101 or
we will help you decide on the type of RESP that best meets your
How much money can I save in RESP?
RESP promoters may invest your money in
different investment vehicles and your investment income may may be
different with different RESP providers.
Click here to get
an idea how much you can save if you invest in
RESP with us.
What do I need to open an RESP?
need to get a birth certificate for your child from the provincial
or territorial government where your child was born. You will also
need your own Social Insurance Number (SIN) from the Government of
Canada and a SIN for the child you are saving for. There is no cost
limit to get a SIN. Even a baby can get one.
How much money can I put into an
2007, there is
no annual limit for contributions to RESPs . For each
beneficiary, the lifetime limit on the amounts that can be
contributed to RESPs is
contribution is not limited but determined by a RESP promoter.
Note: According to the
Income Tax Act, period of time when you can make your contributions
in RESP is limited, and the RESP must be terminated by the end of
the 35th year after the year the plan was opened.
How soon can the person(s) named
in the plan start using the money?
The promoter will pay
Assistance Payments (EAPs) to or for a student if one of the
following situations applies:
the student is enrolled in a qualifying
educational program at a post-secondary
educational institution. This includes
students attending a post secondary
educational institution and those enrolled
in distance education courses, such as
correspondence courses, provided by such
the student has attained the age of 16 years and
is enrolled in a specified educational
program at a post-secondary educational
A post-secondary educational institution
● a university, college, or other
designated educational institution in Canada;
● an educational institution in Canada
certified by Human Resources and Skills Development
Canada (HRSDC) as offering non-credit courses that
develop or improve skills in an occupation; and
● a university, college, or other
educational institution outside Canada that has
courses at the post-secondary school level, as long
as the student is enrolled in a course that lasts at
least 13 consecutive weeks.
What is a qualifying educational program?
qualifying educational program is an
educational program at post-secondary school level, that lasts at
least three consecutive weeks, and that requires a student to spend
no less than 10 hours per week on courses or work in the program.
What is a specified educational
A specified educational program is a program
at post-secondary school level that lasts at least
three consecutive weeks, and that requires a student
to spend not less than 12 hours per month on courses
in the program.
Commencing in 2007, students 16 years of age or
older will be able to receive up to $2,500 of
EAP for each 13-week semester of part-time study in a
program that requires that at least 12 hours per month be spent
What is an Educational Assistance Payment?
Assistance Payment (EAP) is a payment from an RESP to help a
beneficiary continue his or her education after high school. An EAP
is made up of:
EAP also includes amounts paid under a designated provincial program
Do I pay tax when I take money out
of an RESP?
Your contributions: You
will not pay taxes on the money you have contributed in the RESP. You
will get your invested money back without paying tax.
Educational Assistance Payments:
EAPs will be
taxed in the hands of your child, but only when the RESP is closed
or money is taken out to pay for the education of your child. The
promoter reports EAPs in box 042 on a T4A slip and sends a copy to
the student. The student includes the EAPs as income on his or her
return for the year the student receives them. Since many students
have little or no other income, they can usually withdraw the money
When Your Beneficiary Does Not
Continue Education After High School
a child decides not to continue education after high school, you may
be able to:
Wait for a period of time, he or she may decide to continue
Use the money for a brother or sister who does continue
education after high school;
the investment earnings into a
Registered Retirement Savings Plan (RRSP)
to help you save for your retirement. (Your contributions in
RESP will be returned to you tax free and the government grants
will repaid to the Government).
the investment earnings and pay tax on this amount. (Your
contributions in RESP will be returned to you tax free and the
government grants will be repaid to the Government)
Contact us for more information about
RESP we offer to our clients and to get an illustration for your
child showing how much money you can save for his or her
have any questions or concerns feel free