You are now leaving our website and entering a third-party website over which we have no control.
Registered Education Savings Plan (RESP)
What is an RESP?
RESPs can be a great way to save for a child’s post-secondary education. The money invested in an RESP can grow tax-deferred until the time of withdrawal, and the best part is that there are various government savings incentives available to boost your child’s education savings.
Benefits of an RESP
How does an RESP work in Canada?
- An RESP helps you save for a child's education.
- RESP contributions may qualify for the Canada Education Savings Grant (CESG) from the government, which adds 20% on the first $2,500 contributed each year. CESG contributes up to $500 annually and a maximum of $7,200 per child. The beneficiary or the child may also qualify for the Canada Learning Bond (CLB). Quebec and BC residents may also qualify for provincial education incentives.
- There are no annual contribution limits, but the lifetime contribution limit is $50,000 per child across all RESPs. You could also make RESP contributions for up to 31 years.
Who could open an RESP?
To open a Registered Education Savings Plan, the following criteria must be met:
- The subscriber needs to have a valid SIN
- The beneficiary needs to be a Canadian Resident and have a valid SIN.
RESP Accounts that align with your goals
TD offers several RESP options designed to meet your specific needs. Talk to a TD Personal Banker to find the right option for you.
Frequently Asked Questions
There are a variety of qualified investments to choose from based on your financial goals. A TD RESP could hold mutual funds, GICs, ETFs, stocks and bonds. The best part is that you could grow your money and defer the taxes in an RESP.
TD Bank does not provide tax advice. You should consult your tax advisor for questions related to your individual tax situation.
The lifetime contribution limit per child is $50,000, but there is no annual contribution limit. You have up to 31 years to contribute to an RESP, and the plan can remain open for a maximum of 35 years.
If you over contribute to an RESP there will be tax implications. An RESP over contribution is when you exceed the $50,000 lifetime limit per child. If you over contribute, you will have to pay 1% per month in taxes on your share of the excess contribution that is not withdrawn by the end of the month. You have 90 days after the end of the year to pay the tax. Payments from the CESG or any Provincial Education Savings Programs do not count as contributions. TD Bank does not provide tax advice, and you should consult your tax advisor regarding your individual tax situation.
The RESP is designed for funding a child’s post-secondary education. However, you could withdraw your funds from an RESP any time, but keep in mind that there may be tax implications and education incentives such as CESG must be repaid if withdrawing for non-educational purposes. You should consult your tax advisor for questions related to your individual tax situation.
The Canada Education Savings Grant (CESG) is a federal incentive that helps grow a child's RESP. The Government of Canada matches 20% of annual RESP contributions, up to $500 per year, with a lifetime maximum of $7,200 per beneficiary. CESG amounts are paid directly into the RESP and can be invested tax-deferred for post-secondary education.
Articles and tips to help you get started
Ready to Invest? We can help!
Looking for investment advice?