8 Things You Need to Know About Withdrawing Money From Your RESP Account

by Mike Holman

So your little darling is going to a post-secondary educational facility once they finish high school. Hopefully you’ve already verified that their school is eligible for RESPs.  The big question now is how to access some of those dollars that you have saved up in an RESP account for them.


I’ve put together a useful list of all the information you need to know in order to get your money out of an RESP account.  Keep in mind that your financial institution might have slightly different requirements, so please contact them for details.  If you have a scholarship/group/pooled RESP then you will definitely have more restrictive rules and should contact your financial institution.

1) You don’t need receipts or a good story to withdraw funds

If you want to withdraw money from an RESP account, all you have to do is provide proof of enrolment. Check with your financial institution for their proof of enrolment criteria.   The government has provided a Verification of Enrolment form, which most educational institutions will fill out for you. You don’t have to provide receipts or any other kind of justification for your payment request.   Just ask for your money.

2)  Ask for more, rather than less

Withdrawing from an RESP is not as convenient as withdrawing from your chequing account.  Don’t be afraid to ask for enough to tide your student over for a while.  You don’t have to give all the money to the student right away when you withdraw it. Most students are not as financially savvy as you are, and might benefit from getting a regular payment, rather than a lump sum at the beginning of a semester.

3) The money in your RESP is your money, until you give it to the student

All withdrawals of contributions from an RESP account can can be sent to either you (subscriber) or the student (beneficiary).  If you request a withdrawal of accumulated income in the form of an EAP (educational assistance payment), the money has to be sent to the student.

For the record, I don’t agree with the EAP rule – what if a parent pays for tuition/book/residence/meal plan and then requests an EAP – shouldn’t they be getting the cash?

4) Only the subscriber can request payments

The student who is the beneficiary of an RESP account has no control over the money.  They cannot request payments – only the subscriber.

5)  Specify if the withdrawal is to be from contributions, non-contributions or both

There are two parts to an RESP account:

  1. Contribution amount.  This is the total amount of all your contributions to the account.
  2. Accumulated Income.  This is all the money in the RESP which is not contributions.  RESP grants, capital gains, interest payments, dividends are all included in the Accumulated Income portion.

Example of contribution amount and accumulated income amount

Joe contributed $1,200 per year for 10 years to an RESP account he set up for his niece. 20% grants were paid on all the contributions and the investments have gone up in value.

  • Account is now worth $17,000.
  • Total contributions are $12,000 (10 times $1,200).
  • Accumulated income amount is $5,000 ($17,000 minus $12,000).

You can do two types of withdrawals from an RESP account if your child is attending school:

  1. PSE (Post-Secondary Education Payment) is a withdrawal from the contribution amount.
  2. EAP (Educational Assistance Payment) is a withdrawal from the Accumulated income.

Some interesting facts about PSE and EAP:

  • PSE payments are not taxable income and there are no limits on withdrawals.
  • EAPs are taxable in the student’s hands.
  • There is no withholding tax on EAPs.
  • A T4A slip will be issued by the financial institution at the end of the year for any EAP made during the year.
  • There is a $5,000 limit for EAPs in the first 13 weeks of schooling.
  • Most institutions will default payments to 100% EAP which means that the money is taxable income for the student.
  • When doing a withdrawal, you should specify how much of the money will be coming from contributions and how much from accumulated income.

6) Don’t withdraw more than $7,200 of grant money per beneficiary

If you have a family plan RESP, make sure you don’t withdraw more than $7,200 of grant money per beneficiary. $7,200 is the lifetime grant limit per beneficiary. Typically, any EAP will contain grant money.

Because the subscriber sets the amount of EAP for each withdrawal, it’s possible for someone to withdraw a disproportionate amount of EAP for one beneficiary which might mean that one beneficiary will be over the limit for RESP grants.

If that happens, the grants will be returned to the government. Your financial institution keeps track of how much grant money is paid out to each beneficiary, so all you have to do is ask them for an update and change your withdrawals appropriately.

Example of over-withdrawing grant money

Homer has two kids; Bart and Lisa. He set up a family RESP for them at a young age and eventually maxed out the lifetime grant limit of $7,200 for each child. This was accomplished by contributing $36,000 for each child.

Eventually the account looked like this:

  • Contributions = $72,000
  • Accumulated income = $30,000 (this includes the grants)

When Bart enroled at a local heavy machinery training school – Homer started making withdrawals from the RESP account. Over the two year program, he withdrew $30,000 and sent the money to Bart. However, Homer didn’t understand RESP rules very well and didn’t specify if the withdrawals were to come from contributions, accumulated income or both.

His institution defaulted the payments to EAP (from accumulated income) which means that all the grant money in the account went to Bart. Once the government figured out what happened, they “took back” the amount of extra grants used by Bart. $7,200 was removed from the RESP account. This could have been avoided if Homer had asked his institution where the grant money was going. He could have withdrawn just enough EAP to give Bart his share of the grants, and then started to withdraw contribution money.

Related Article:   Family Plan RESP Withdrawals – Don’t Overpay Grants To A Beneficiary

7) Watch the taxes

EAPs are treated as taxable income for the student. Most students don’t pay much, if any income taxes. If the student is in a taxable situation, it might be worthwhile to adjust the payments to reduce the amount of EAP which will reduce the taxable income for that year.

8 Don’t leave Accumulated Income in the account

When accumulated income is withdrawn from an RESP account as an EAP – there are no penalties and the money is considered taxable income for the student. If the student drops out of school and the accumulated income has to be withdrawn as an AIP (Accumulated Income Payment), then the RESP grants are returned to the government, the money is taxable income for the subscriber and there is a 20% penalty tax as well.

Clearly removing accumulated income from your RESP via EAP is the preferable method.

If you have $20,000 of accumulated income in an RESP account, one might decide to withdraw $5,000 for each year of a four year program. Sounds reasonable, but what happens if your child decides she’s had enough education after one year? You will be left with $15,000 of accumulated income in the account which will be very expensive to remove as an AIP.

You can take advantage of the six-month rule which allows you to do an EAP for six months after the child has stopped going to school. Or you can wait and then eventually use other methods to reduce the RESP penalties. Alternatively, you can remove more accumulated income while the child is going to school. This is the reason why most financial institutions default payments to “EAP” – because it’s generally in your best interests to do so. Don’t worry about taking more than the child needs – you can store the extra money in your TFSA or the student’s TFSA.

9) The child can still receive grants, even while doing withdrawals

Yes, that’s right.  As long as your child is still eligible for grants, you can continue to make contributions and receive grants in the RESP account while doing withdrawals.  Check the RESP contribution page to make sure the child is still eligible for RESP grants.

More detailed RESP information

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

Have you completed an RESP withdrawal?  Do you have any tips?

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{ 112 comments… read them below or add one }

101 Judy

We have two children who are both starting university this fall. How detailed do we need to be in keeping receipts for their expenses to explain the withdrawals from the RESP family account?

102 Craig Buchner

Hi Mike, my question is this.

Since ALL growth (grant and appreciation of my contributions (PSE) and grant appreciation) is considered EAP, wouldn’t it make sense to withdraw all the PSE and put into a TFSA, so that growth is accumulated tax free. It can then be given to the student tax free. That way only the growth on the grant portion accumulates within the RESP , reducing the amounts that will be taxable in the hands of the student.

Are there any withdrawal rules about removing all the PSE at once?

103 Mike Leim


Hi,great article. There are two family plans setup for my kids. One by myself and one by their grandparents. Each family plan has both my kids as beneficiaries… Does it make sense to withdraw EAPs (because you want to get the grants out of plan first) from both plans at the same time or start with one plan ? I need to try and get the grant maximum out first in case the kids dont need all the RESP for school. Then I can keep the extra $ since they dont need it! does CRA keep track of how much grant money has been returned to each child, even if it comes all from one of the plans?


104 Mike Leim


Hi, great article. There are two family plans setup for my kids. One by myself and one by their grandparents. Each family plan has both my kids as beneficiaries… Does it make sense to withdraw EAPs (because you want to get the grants out of plan first) from both plans at the same time or start with one plan ? I need to try and get the grant maximum out first in case the kids dont need all the RESP for school. Then I can keep the extra $ since they dont need it! does CRA keep track of how much grant money has been returned to each child, even if it comes all from one of the plans?


105 Jodine Ducs

There was a number to call (and I can’t find it now, of course) to find out how much contribution room was left in your RESP. Do you have it? Service Canada was not helpful in the least.

106 Tom Temple

Just a comment on rule 3. The EAP is certainly taxable in the students hands, but the institution may allow the money to be sent to the contributor. With my institution, there was a box that the student had to initial to make it happen.
Not a problem in my case, but if the student wont sign, just use rule 4.

107 Ken

I have an 18 month old grandson, who was born under some very precarious conditions, and while I would like to make annual contributions on his behalf, I am curious to know what happens to the money, if for any reason he cannot attend either University or College when he is of age? Can the money be used for any other type of special care needs educationally, either along the way or only when he turns 16?
Also, given our age as grandparents (late 60’s), are we wise to have have his father, (our son) and his mother listed on the plan which we open at the bank, or simply have them named in our will as beneficiaries. In other words upon our deaths our estate goes to our children, a son and daughter, for them to administer.

108 Linda

Sorry for the mix up I meant RESP. Can it be used for a child going to school in the USA? If yes what are the penalties for doing this?

109 Blair

Hi Mike,

I have a couple of questions for you. I have a family RESP plan with Waterhouse that was transferred from Investor Group. At time of transfer (5 years ago) I confirmed that the grant attributed to child #1 was $3700 and the grant for child #2 was $3000. Child #1 is currently in year 2 of a 3 year collage program. I have drawn down much of the grant and growth on the account. There is approximately $2500 grant remaining in the account. Am I permitted to draw down the remaining $2500 while child #1 is still in college? Given that the total grant money in the plan was $6700, I believe I can. Can you confirm? I want to make sure that the government does not come knocking for a return of grant monies down the road.

My second question is related to the contribution portion of the plan. Given that I am unsure if child #2 is going to post secondary school, would it be an effective tax strategy for me draw down the contribution portion entirely from the RESP and put it into a TFSA so that it grows tax free?

Thanks in advance,

110 Vera Kwong

” As long as your child is still eligible for grants, you can continue to make contributions and receive grants in the RESP account while doing withdrawals.”

According to your post said, can I still contribute after my daughter turned 18? She received 4,300 grant so far. Will she receive grants from contributions after 18

111 ian gowans

My question revolves around student taxes. My son worked for half a year prior to going to university. He made about $8000. He saved a portion of it for education. In his first year, he withdrew about $13000 for RESP money. His tax return suggests he needs to submit $700. Does this seem reasonable? We live in Ontario. Thanks!

112 Lois

I have a family RESP with BMO in the names of my three sons. I was not advised that there were, essentially, two pots of money, the PSE and EAP. I realize that I should have educated myself prior to accessing the funds but I did not. I made withdrawals on behalf of my eldest son who had been working for a few years prior to going to College. He was surprised, as was I, that he was taxed on a large portion of his allocation, especially since it exceeded his portion of the EAP, if we allocate 1/3 of this money to each beneficiary of the plan. I asked BMO to reverse this accounting setup and to issue him a new T4A slip: I have been advised that their “policy” is to pay out the taxable portion of the RESP first and that this cannot be changed. Is there any recourse I can take? I am grateful for any advice you can offer.

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