How an RESP works

Opening an RESP

  • It's easy, all you need is a Social Insurance Number (SIN) for yourself and your child
  • No fee is required to open an RESP
  • Talk to your financial advisor to open an account with IA Clarington

Contributions

  • Anyone can contribute to an individual RESP -parents, guardians, grandparents, other relatives or friends
  • You can put in up to a maximum of $50,000 for each child named in an RESP across all plans

Grants
Canada Education Savings Grant (CESG)

  • When you open an RESP for an eligible beneficiary, the Government of Canada will add to your savings through CESG
  • The lifetime maximum amount of CESG per child is $7,200
  • Depending on your family's net income, you may be eligible to receive enhanced CESG

Canada Learning Bond (CLB)

  • To qualify for the CLB, you must be eligible to receive the National Child Benefit Supplement
  • When you open an RESP for your child, the Government of Canada will contribute a onetime payment of $500 to help you start saving early
  • You can get an additional $100 each year, up to a maximum of $2,000, if you are eligible to receive the National Child Benefit Supplement and your child was born after December 31, 2003

Withdrawals

  • When your child is registered at an approved post-secondary institution, you can start making withdrawals from your RESP account
  • The contribution portion of the RESP is tax-free and there is no restriction on how these funds are used
  • The CESG and accumulated earnings on all contributions are paid to the beneficiary as Educational Assistance Payments (EAPs) and are considered taxable income to the beneficiary
  • In the event your child does not complete a post-secondary education, you can talk to your financial advisor about other options available to you