Registered education savings plan (RESP)

These are the payments a beneficiary receives from any investment growth earned by an RESP, plus any Canada Education Savings Grant, provincial grants, or Canada Learning Bonds.

EAPs are limited to $5,000 during the first consecutive 13 weeks of enrollment. After that you can request any size payment.

An RESP can hold a variety of investments, from fixed-income products to equity investments like mutual funds and individual stocks and bonds. A Sun Life advisor can help you decide what combination of investments will work best for you.

You can contribute as much as you want per year to an RESP, but no more than $50,000 in total per beneficiary. (Neither government grants nor any investment growth in your RESP count toward the $50,000 limit, so there could be more than $50,000 in your plan by the time your child needs it.

There is no deadline. You can contribute to an RESP any time during the year. Government grants are applied by calendar year.

Canadian residents can open and contribute to RESPs for their own children or grandchildren. Family RESPs (that cover more than one child) must be opened by a relative, but individual RESPs can be opened by anyone. And anyone – parents, grandparents, godparents, friends – can contribute to either type of plan.

If you contribute to an RESP, you won’t get a tax deduction A tax deduction refers to the amount you can subtract from your taxable income to lower your tax bill. , but when the student you’re saving for withdraws money from the plan for school, any investment growth in the plan will be taxed as that student’s income rather than yours – which can produce significant tax savings.

You can transfer funds between RESPs if the beneficiary of the plan you’re transferring to is under 21. They also need to be a sibling of the beneficiary whose plan you’re transferring from or if you have a family plan that covers more than one sibling.

Special rules apply to any Canada Education Savings Grants (CESGs) or Canada Learning Bonds (CLBs) that may have been received, so speak to your Sun Life advisor before making any moves.

Regardless of your family income, the federal government will top up your annual contribution by 20%, up to $500 per year and $7,200 in total, per beneficiary.

The program is called the Canada Education Savings Grant (CESG). If your family income is low, your plan may be eligible for a Canada Learning Bond (CLB). Some provinces may offer additional assistance programs.

To withdraw from an RESP, you’ll have to provide proof that the beneficiary is enrolled in a qualifying post-secondary educational program, and you may have to provide receipts for expenses such as books and laptops.

Payments from the investment growth earned by an RESP, plus any Canada Education Savings Grant, provincial grants, or Canada Learning Bonds (the educational assistance payment) are limited to $5,000 during the first consecutive 13 weeks of enrollment; after that you can request any size payment, as long as the amount is justifiable. You can withdraw as much of your own contributions to the plan as you wish at any time.

The CESG has certain contribution requirements for beneficiaries who attain 16 or 17 years of age. RESPs for beneficiaries 16 and 17 years of age may be eligible to receive the CESG if at least one of the following two conditions is met:

• A minimum of $2,000 was contributed to (and not withdrawn from) the RESP of the beneficiary before the end of the calendar year they turned 15.
• A minimum annual contribution of $100 was made to (and not withdrawn from) the RESP in any of the four years before the end of the calendar year the beneficiary turned 15.

Yes, you can open an RESP for yourself. However, if you are 18 years old or over, you may benefit from a TFSA over an RESP.

A Sun Life advisor can help you decide which type of account is best suited for your needs.