One of the main benefits of RESP accounts is the federal Canadian Educational Savings Grant (CESG). This grant is **20%** of any eligible contributions in an RESP account.

### How the RESP grant system works

Let’s say you open an RESP account for your bouncing new baby and contribute $1,000 into the account. Your financial institution will send the account and contribution information to the Canadian government for grant approval. If the grant is approved, the institution receives the grant money and deposits it into your account.

### The math

20% of the $1,000 contribution is $200, so you will now have an extra $200 in the account courtesy of the Canadian government. This basically gives you an extra 20% one-time return on your contribution.

*Please note that additional RESP grants are available for lower income families – Check it out, the income thresholds are higher than you think.**Quebec has additional RESP grants as well.*

**Basic RESP contribution rules and numbers to know**

**$2,500**– Amount of annual grant-eligible contribution room accrued each year starting in 2007 or the year the child was born (whichever is later). The contribution room continues accruing up to and including the year when the child turns 17 years old. This amount is based on the calendar year and not the birth date.**$2,000**– Amount of annual grant-eligible contribution room accrued each year starting from the year the child was born or 1998 (whichever is later) up to and including 2006.**20%**– Amount of grant earned on an eligible contribution. For example: a $1,000 contribution would earn a grant of $200, if that contribution is eligible for a grant. There are additional grants available for lower income families.**$500**– Maximum amount of grant a beneficiary is eligible to receive for each calendar year from the year they were born or 1998 (whichever is later) to the year they turn 17 years old. This amount was only $400 for years prior to 2007. A calendar year is from January 1st to December 31st.**$7,200**– Lifetime grant limit per beneficiary. If you contribute $2,500 every year, you will hit the maximum grant level in the fifteenth year, and no more grants will be paid to the beneficiary. This limit includes additional grants available to lower income families.**$50,000**– Lifetime contribution limit per beneficiary. Because there is no annual limit, you could potentially make one single contribution of $50,000 to an RESP if you choose.**Contribution room carry over**. One of the great things about the RESP is that you can carry over unused contribution room into future years. However, there is a catch: Only one previous year’s worth of contributions can be used each year.**Contributions are not tax-deductible**. You won’t get a tax slip, and you can’t deduct RESP contributions from your taxable income.

For example: If you start an account for your six-year-old child, you can contribute $2,500 (this year’s contribution room) plus another $2,500 (from previously unused contribution room) for a total of $5,000, to receive a grant of $1,000. You are allowed to contribute more than $5,000 in this scenario, but there will be no grant paid on the amount above $5,000. When calculating contribution room carryover from past years, don’t forget that the contribution limit was only $2,000 prior to 2007.

### RESP contribution examples

Let’s do some examples to clarify exactly how this works.

**Example 1 – Simplest example**

Steve was born in 2010. His parents are broke, but one kindly grandmother decides to open an RESP account for him.

She opened the account in 2010 and has $2,500 of contribution room available. She contributes $1,500 to the account in 2010, so the RESP grant is $300 (20% of $1,500).

In 2011, she contributes $1,200, thereby qualifying for a $240 grant.

**Example 2 – A more complicated example**

Little Johnny was born in 2006. His parents decide in 2010 to set up an RESP account for him. They want to know how much money they can contribute each year to catch up on all the missed government grants.

Let’s add up the current contribution room.

2006 – $2,000 of contribution room

2007 – $2,500 (new rules)

2008 – $2,500

2009 – $2,500

2010 – $2,500

In 2010, the couple has $2,500 of contribution room for the current year plus $9,500 of contribution room from previous years.

Since the rule is that you can only contribute up to $2,500 of previously carried over contribution room each year in addition to the current contribution room, this means they can contribute this year’s amount ($2,500) and another $2,500 for a total of $5,000, which gives a grant of 20% or $1,000 for 2010. Since they only used $2,500 of their available $9,500 of carried over contribution room, they now have $7,000 in contribution room to carry over for the future.

- In 2011, they can contribute another $5,000 for a $1,000 grant. $4,500 of contribution room is carried forward to the next year.
- In 2012, they can contribute another $5,000 for a $1,000 grant. $2,000 of contribution room is carried forward to the next year.
- In 2013, they can contribute only $4,500. $2,500 from the current year plus $2,000 they carried over from the past.
- In 2014 and beyond, they can only contribute $2,500 each year and expect to receive the full grant of $500.

**Summary of contributions they can make to get all the government grants:**

- 2010 – Contribute $5,000, receive $1,000 grant, $7,000 of unused contribution room
- 2011 – Contribute $5,000, receive $1,000 grant, $4,500 of unused contribution room
- 2012 – Contribute $5,000, receive $1,000 grant, $2,000 of unused contribution room
- 2013 – Contribute $4,500, receive $900 grant, $0 of unused contribution room
- 2014 and onward – Contribute $2,500, receive $500 grant

Please note there are special RESP contribution rules for 15, 16 and 17-year-olds.

### RESP family plan contribution allocations

If you have a family plan with two or more beneficiaries, you need to allocate each contribution between the beneficiaries. For example, you might want to set up all contributions to be divided equally between the account beneficiaries. Or you might have a particular contribution that should be allocated to just one beneficiary. You must set the allocation so the government can track the grants for each child.

When you open an RESP account or add a new beneficiary to an existing account, you can set up the default allocation to split the contributions equally among the children on the account. If you want to make a contribution with a different allocation, you have to indicate this on the purchase order.

### More detailed RESP information

Check out the RESP rules page for a list of more detailed RESP articles on this site.

{ 44 comments… read them below or add one }

← Previous Comments

hi Mike,

Thanks for the quick reply…perhaps an example would make it clearer….

Say in yr 1, you move everything(8K CAD for example) into the div. fund and then get the re-investment(so say 6 shares at 20 CAD per share). Once you receive the re-investment then you transfer back the 8K to the growth fund.

So 8K is swapped back and the dividend fund keeps the additional 6 shares before the free swap. If you grow both funds by the max for 10 yrs, and do this swap every year, you get close to 4-5K additional shares in the dividend fund.

Makes sense?

@May – Read this page for withdrawal info: http://www.moneysmartsblog.com/resp-withdrawals/

@Div & RESP – I see what you mean. Like I said, the value of the div fund should go down by about the amount of the dividend paid, so it doesn’t really matter if you end up with more shares – moving the money around won’t increase the amount of money you have.

I have 3 children aged 14,9, and 7. I can’t afford to make the max contributions to each child to maximize my contributions. I currently contribute $100/mth per child. However, I was advised by my financial planner that it would be wise to move to a Family RESP plan, shift all $300/mth to my eldest to maximize his contributions, and when he goes to school, pull out $10k/year of the capital and immediately re-invest $5k/year for my other two children until they are maximized. This way, I can take advantage of the age gap, maximize the contributions by re-using the same capital over and again. Are there any consequences (tax or otherwise) for doing this?

Yes, I’m interested in a version of this question as well. My oldest is in college right now and I have one more coming up in a few years!

@SB & @s – Yes, that will work fine. You can also do an EAP (withdrawal of non-contributions) and put that money into the younger kids RESP. Of course that money is taxable for the student.

If my elder one is 13,other two are 11 and 2 .i am participating $450 how my eldest can take Advantage of this group plan .i am paying for elders 200 $ and for younger its 50$.I just started RESP now.He may have total of 450*5*12=27000+all other grants for all children,When he is 18yrs .Now how he will use this money and how i can return grant for other kids back to them as that is going to be used by my elder one.? Gov can give grant twice for same kidsif that have been used by elder one?2ndly by the time he will be 18 other will be 16 and 7 .then they will loose there contribtion room for thoe years?how will work can you will explain with `the example of my situation.

Thanks

My son was born in 2000 and we moved to Canada in 2005. Do we have carry over RESP contribution room for year 2000 – 2004 while we were not in Canada?

Is the deadline for contributions to a RESP still Dec. 31, or is the end of Feb. like RRSP

@PL – No – http://www.moneysmartsblog.com/canadian-resident-and-non-resident-resp-eligibility-rules/

@Barry – Dec 31st. Although, it’s not really a deadline in the same sense of the RRSP deadline. Read the article again and make sure you understand.

Hello Mike,

Thank you so much for this article… it’s exactly the information I was looking for. I love the “more complicated” example, since it’s almost applicable to my case, which is a little more complicated. We have been contributing to my daughter’s RESP’s since 2004. We started with $600 per year, and two years ago we pumped it up to $2,400. I did the math based on your example, and we have a $12,000 room from the previous years . I know that we can only “catch-up” on a one-year basis. We want to contribute more now so that we can take full advantage of the room we have. How do we do the math in this case? We want to contribute the $2,500 per year plus any room we have per year. Can we contribute $3,900 this year ($2,500 for 2013 + $1,400 for 2004) or do we have to contribute $2,600 ($2,500 for 2013 + $100 for 2012)? Or am I going bananas and not getting the message of how to calculate this?

I hope I’m not being too confusing! Thanks, Mike… and Happy New Year!!

Hellen :o)

@Hellen – Good question.

In any given calendar year, you can contribute $2,500 which is the grant-eligible contribution room for that year and get $500+ of grants.

When you are making contributions in excess of $2,500 in one year, you can use up any amount of unused grant-eligible contribution room per year up to $2,500 and get another $500 in grants.

In other words – all the unused grant-eligible room gets accumulated in one bucket. Each year you can use up to $2,500 of it and get $500 in grants.

Hopefully that makes it clearer.

My kid was born in 2002, we came to Canada in 2009 for work, my kid got the SIN in 2011 (became a Permanent resident). I opened the RESP acct in 2012. For determining the accumulated grant, do I start in 2002, 2009 or 2011?

Do you know if they are going to increse the amount beyond $ 50000.00 in the future? Since the cost of education is going up all the time. I am almost max out the $ 50000.00 and my son is 12 years old. Thanks Suthida

Thank you, Mike for educating us on RESPs! Will you be able to help me? I overcontributed in 2011 with 2 installments of $5000. I received the $500 CESG for the first $2500, and then another $114 CESG for the second $2500. Will I ever be eligible to receive the remaining CESG for that second $2500? How long will I have to wait before I should contribute to my child’s RESP again?

Thank you!

@Balji – The contribution room starts for the year when the child became a Canadian resident – http://www.moneysmartsblog.com/canadian-resident-and-non-resident-resp-eligibility-rules/

@Terry Hui – Read this http://www.moneysmartsblog.com/resp-contributions-didnt-get-any-resp-grant/

My kid was born in april 2005, we got perment residence visa in 2013, my kid got the SIN in march’2013(became a Permanent resident).For RESP I can contribut for 2005 to 2012?

1 st Boy (15 Years) we are paying $1200/Year (15 Payments) with USC.

2 nd Boy (12 Years) we are payiny $1200/Year (12 Payments) with Heritage.

3 rd Girl (9 Years) we are paying $1200/year (9Payments) with CET.

How can get maximum benefit of Gov. Grant and so on?

Please let me on reply email.

Thanks

Mahesh

I contributed $2,500 RESP each for my 2 children back in January 2013. I still haven’t received my $500 grant for each, as of July 2013. I know I haven’t reached the lifetime grant max. Is the government late with its payments? Who should I contact? Can you please help?

Hi Mike

I have moved my kids RESP around several times over the past 15 year and have lost track of how much I have contributed. Is there some way of finding out how much contribution room I have left. I spoke with someone at the CRA but they didnt have an answer

Thanks

Hi Mike, I’m hoping you can give me a simple answer ASAP. I have to fax my son’s maturity application tomorrow for his RESP with Heritage, and I’m not absolutely sure about which payout option to choose. I won’t give details, but we have had some major issues going on the last several months, and although I’m not one to leave things like this to the last minute, circumstances threw me off my game & now I’m a bit anxious trying to decide what way to go. Are you at all familiar with their plans? I am assuming I should go with Scholarship Option #3- he will be doing a 4 yr program. Can you help me, please?!

Thanks a lot Mike for the information given in the article. But I still have a question to ask. What if I contribute like 20,000 this year, and won’t do the contribution over the next couple of years, could I still get the grants for the subsequent years besides for the year of 2013?

Hi Kai – As it says in the article – any contribution in excess of the grant-eligible amount won’t get any grants.

So if you are eligible for $1,000 of grants this year (from a $5,000 contribution), you’ll get $1,000 only. The extra money will just be in the RESP account and will never get a grant.

We have a Resp family plan for our three children,(18, 23,26 years).I tried to withdraw the total grants and growth from the RESP this year. My financial told me that each child grants and growth $7200 is meant for each child and not transferable if there is a balance from the $7200.But, all grants and growth can be taken out if all the children have reach 21 years of age.Please advise

My sister has three children. I wanted to contribute to their education so I wanted to open an RESP for them. I was told that I cannot open a family RESP so I opened three individual RESPs, one for each child. My sister also has a family RESP for the same children. We contribute separately to these plans. Is there any conflict between the individual RESP’s I set up and family RESP. Are the annual contributions separate for each plan or is there a limit per child?

Regarding the question on where to find out about total contributions. I had the same question and RBC gave me the number to call which I did. They are able to answer all your questions if you are the custodial parent. You will need the kids SIN numbers. The phone number is 1-888-276-3624

How do I find out how much contribution carry over each of my children has?

child’s birth date : 10 sept 1999

contributing $2000 per year since 2005, received CESG till date 4386.00

current plan with CEFI ;

what is the best way to invest for max govt grant

Mike,

Thanks for providing great information on what can be a really complicated program for the un-initiated. You’ve demystified it for me.

I’m happy to say we have managed to grow our family RESP to 100k and our first of 4 started University on a full scholarship – so the pressure has lessened a little…

To maximize the fund, and to not run the risk of our kids not putting the true value on the funds contribution, they will be required to repay half of what they take out to the fund for the remaining kids – or if they put money in they will have a credit of double their money sitting in the fund (Put in $5,000 before university from PT jobs – take out $10,000 for educational needs or if you haven’t pre-contributed; take out $10,000 and repay $5,000 later)

If there is anything left after all 4 finish their education we will either split the balance between the kids or spend it towards a family vacation

What do you think of the approach? is there a downside to treating the funds like a business “You take out X, you repay Y”

Thanks,

Chuck

Hello,

I have 2 kids, one born 1998 and second one 2004

I want to open a family plan for 2 kids, can my older child get a grant?

or she is too old now?

if yes, I will put money for a younger child and the older can use it?

Thanks,

When is the deadline for a contribution for 2014 – the end of the calendar year or the gov.’t fiscal year? I have $1000 dollars from the kids’ grandparents for our family plan. I am not going to be able to go to the bank and transfer the funds from one account to the resp account before Dec.31, 2014. So if I did the transfer in Jan., could I put it towards my 2014 eligibility or is now a 2015 contribution? I have not put any other funds in this year (2014). So basically, how is contributing in Jan going to effect it?

Love this blog!!!

Question – I just opened a family td e series mutual funds RESP for my toddler and baby. I have funds in another institutions resp account which I am transferring over to my e-series. Will that transfer affect my contribution room for this year?

hi mike,, thanks alot for this forum

i had a baby in 2015 may

and want to start with resp now only ,,just waiting for the sin no. to arrived ,,,

now there are so many institutes that do RESP

which one is the best for me,,, do every institute charge the fees or it depends,

can you pls help me out with this,,,

Lots of great information but something I could not find information on is I have 2 children, one born in 1997 and we stared contributing in 1998. Our son was born in 2000 and we started contributing for him on a 50/50 split between the two for a few years. We then stopped with the contributions until 2014 and started again. I have no idea how much grant money either one of them have. Can my financial institution give me a breakdown?

Thank you for the article. It answered all my questions that even my financial advisor couldn’t. Cheers.

Hi

We were leaving in USA when we received Canadian PRs. in 2012.

we started leaving in Canada only in 2015.

Am I entitled for back contributions to RESP account and how much.

much appreciate the response.

Quick question, what happens if contributions are made in advance ?

The scenario is that we have no carry-over contribution room so our contribution room for 2015 was 2500$. I incorrectly programmed the transfer so there was 2 transfers so we ended up contributing 5000$ for 2015. Our contribution room for 2016 is obviously gone but what will happen for the grant ? Is there a limit of 500$ of CESG per year ? If so, does it mean that we’ll get the extra 500$ deposited next year or is it simply lost ?

We would like to contribute money for our grandson. Are their any special rules

My son was born in 2006 and I opened an RESP account with TD and started contributing to the account. Part of the money was contributed as direct monthly withdrawals from another bank account and the rest was accidental money that I contributed now and then. I lost track of the money contributed altogether and don’t know exactly how much i paid each year. In order to go back and contribute the carry overs I need to find out how much space I have and TD told me that i should contact the government since they know the exact amount I have contributed so far. Where shall I contact?

Dear Mike!

My son was born in 2014 and has received about $25,000 as a gift from family members to be specifically invested to cover his future educational expenses. I opened a self-directed RESP account in 2014 and I’m contributing $200 a month ($2,400 a year) to get a maximum grant money. However, I was always thinking of what would happen if I contribute all his gift money + a little more in one shot. I’m afraid to use my son’s gift money to cover other non-education related expenses.

In the article, you’ve mentioned that there is no annual limit on the contribution amount. So if I decide to contribute $31,200 in one year and stop any additional contributions until my son goes to the university will he be still eligible to receive $500 grant money on a yearly basis or not?

Thank you in advance for your explanation.

Arina

P.S. $31,200 = $36,000 (to receive $7,200 grant) – $2,400 (already contributed to my son’s RESP account)

My 2 children are 6 and 5, we would like start investing in RESPs for them. We are confused in who to go with. Do you suggest that we go through a bank or an independent company?

We are planning on being aggressive with the initial payments…is this something that would benefit us?

I look forward to hearing from you.

we are Canadian citizens and were contributing for our child since 2014 and getting grant as well. now we have moved to USA and still contributing. We have the resident house in Canada. Are we supposed to get the Govt Grant and the 20% on our contribution. We may come back to Canada anytime.

Question : Shall I stop contributing in RESP, (2) Whether we will get 20% Govt grant on the contribuion. 3) If we receive any government grant, shall we keep it or return. Thanks