There’s a clock running on your child’s education savings, and it resets on January 1. The Canada Education Savings Grant — a 20% top-up on your RESP contributions, up to $7,200 per child — is calculated on a calendar-year basis. Contributions made by December 31, 2026 earn this year’s grant room. Contributions made on January 2 earn next year’s.
If you haven’t opened an RESP yet, or you’ve been meaning to top one up, now is the time to act. Here’s everything you need to know.
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What is an RESP, anyway?
A Registered Education Savings Plan is a contract between you (the “subscriber”) and a financial institution (the “promoter”) — a bank, credit union, trust company, or scholarship plan dealer — set up to save for a child’s education after high school. That includes university, college, CEGEP, trade school, and apprenticeship programs.
Three things make it special:
1. Your money grows tax-sheltered. You don’t get a tax deduction for contributing (unlike an RRSP) — you contribute after-tax dollars. But the investment growth compounds tax-free until it’s withdrawn.
2. The government adds money. The Canada Education Savings Grant matches your contributions, and lower-income families can get the Canada Learning Bond on top.
3. Withdrawals are taxed in the student’s hands. When the money comes out to pay for school, the grants and growth are taxed as the student’s income — and most students have little other income, so the tax is often close to zero.
Anyone can open an RESP for a child — parents, grandparents, other relatives, even family friends. An adult can also open one for themselves.
The $7,200 grant, explained
This is the headline feature. The Canada Education Savings Grant (CESG) adds 20% on the first $2,500 you contribute per child, per year — that’s up to $500 a year in free money, up to a lifetime maximum of $7,200 per child.
The math is simple:
– Contribute $2,500 in 2026 → $500 grant
– Contribute $1,000 in 2026 → $200 grant (still 20%, just on less)
– Contribute $0 in 2026 → $0 grant (but the room carries forward — more on that below)
At $500 a year, it takes about 14 and a half years of full contributions to collect the entire $7,200. Start when your child is born and contribute $2,500 a year, and you’ll max it out around their 15th birthday.
Lower- and middle-income families get extra. The Additional CESG adds a further match on the first $500 contributed each year, based on your adjusted family net income for 2026:
– Under $58,523 → extra 20% ($100 more), for up to $600 total that year
– $58,523 to $117,045 → extra 10% ($50 more), for up to $550 total that year
– Over $117,045 → the basic $500 only
Either way, the lifetime cap is the same: $7,200 per child, including any additional amounts.
To be eligible for the CESG, the child must be a Canadian resident when the contribution is made, have a Social Insurance Number, and be named as the beneficiary of the RESP. The grant is available until the end of the calendar year your child turns 17.
One catch for late starters: if your child is 16 or 17, they can only receive the CESG if, before the end of the calendar year they turned 15, either at least $2,000 total was contributed to their RESP (and not withdrawn), or at least $100 was contributed in any four previous years. If you’re starting an RESP for a teenager, open it early and get some contributions in — this rule exists to stop people from opening an account at 16 and scooping the grant.
Contribution limits and the December 31 deadline
Here are the limits that actually matter:
– No annual contribution limit. You can put in as much or as little as you like each year.
– Lifetime contribution limit: $50,000 per child. This counts all contributions across every RESP opened for that child, from every contributor — parents and grandparents combined. Government grants and bond money don’t count toward the $50,000; only your contributions do.
– The grant sweet spot is $2,500 a year ($5,000 in a catch-up year), because that’s what the CESG is calculated on.
The deadline: December 31, 2026. Unlike RRSPs, there’s no “first 60 days of the new year” grace period. The CESG is calculated on a calendar-year basis, so money has to be in the RESP during 2026 to earn 2026’s grant. Don’t wait until New Year’s Eve — give your bank or brokerage a few business days to process the deposit.
Missed a year? You can catch up
Unused CESG room doesn’t disappear — it carries forward until the end of the year your child turns 17. If you contributed less than $2,500 in a past year (or nothing at all), you can catch up on one previous year’s grant at a time.
In a catch-up year, you can contribute up to $5,000 and earn up to $1,000 in CESG (20% × $5,000) — the current year’s $500 plus one year of unused room. You can’t claim more than one extra year’s room per year, no matter how much you contribute.
Example: you contributed nothing in 2025. In 2026 you contribute $5,000. You receive $500 for 2026 plus $500 for the unused 2025 room — $1,000 total. The remaining older years stay banked for future catch-up years.
The over-contribution trap
Go over the $50,000 lifetime limit and the CRA charges 1% per month on the excess — on your share of it — for every month it stays in the plan. Each subscriber is liable for their own share. Withdraw the excess and the tax stops, but here’s the sting: withdrawn amounts still count as contributions when the CRA checks the lifetime limit.
This is the trap that catches generous families: a grandparent quietly opens a second RESP for the same child, and nobody discovers the overlap until a penalty notice arrives. If multiple people are contributing for one child, coordinate. The $50,000 limit is per child, not per account.
Watch out for group (pooled) plans
There are three kinds of RESPs. Individual plans (one beneficiary) and family plans (siblings, with grants and contributions shareable between them) are the flexible ones — you decide when and how much to contribute, and you can take a break anytime.
Group plans — also called pooled or scholarship plans — work very differently, and they deserve a warning. They’re usually offered by scholarship plan dealers, pool your money with other families whose children are the same age, and lock you into a fixed contribution schedule set by the plan’s actuary.
The problems, as flagged by regulators: steep front-loaded sales charges (often several thousand dollars per child, with early payments going mostly to fees rather than investments), fixed schedules with penalties for missed payments, and lost fees if you cancel or your child doesn’t pursue post-secondary education. For most families, an individual or family RESP at a bank, credit union, or discount brokerage is simpler, cheaper, and far more forgiving.
How withdrawals work (and who pays tax)
When your child enrols in an eligible post-secondary program, the money comes out in two streams:
– Your contributions can be withdrawn and returned to you tax-free (or given to the child). They were after-tax dollars going in, so they’re tax-free coming out. No tax slip is issued for these.
– Educational Assistance Payments (EAPs) — the CESG, the Canada Learning Bond, and all the investment growth — are taxable income for the student. Most students earn little, so the tax is usually minimal.
EAPs are capped at $8,000 during the first 13 weeks of full-time studies, with no limit after that (part-time programs have a $4,000-per-13-week limit). The school must be an eligible designated institution in Canada or abroad, and your promoter will ask for proof of enrolment.
What if your child doesn’t go to school?
You have options, and none of them involve panicking:
– Keep the plan open — the RESP can stay open until the end of its 35th year, so there’s time for a late decision.
– Name a new beneficiary — in a family plan, unused money can shift to a sibling.
– Transfer to an RRSP — the growth (an “accumulated income payment,” or AIP) can be rolled into your RRSP, up to $50,000 lifetime, if conditions are met. This avoids the penalty tax described below.
– Take the money back — your contributions always come back to you tax-free. The grants (CESG and CLB) go back to the government. The growth is paid to you as an AIP and taxed at your regular rate plus an extra 20% (12% in Quebec).
That extra 20% is the price of an RESP that never funds an education — another reason to be reasonably sure before stuffing the full $50,000 in early.
The Canada Learning Bond: $2,000 for lower-income families
If your family has low income, there’s more. The Canada Learning Bond pays up to $2,000 per eligible child with no contributions required — you just have to open the RESP.
It works like this: $500 in the first year of eligibility, then $100 for each additional year of eligibility up to and including age 15. It’s retroactive, so you don’t lose past years if you open the account late. The child must be born on or after January 1, 2004, be a Canadian resident, and have a SIN. The primary caregiver must have filed tax returns for the years claimed and be eligible for the Canada Child Benefit.
For the July 2026–June 2027 benefit year, the income cut-off is an adjusted family income of $58,523 or less for families with 1–3 children (higher thresholds apply for larger families). A caregiver can request it for a child until the day before the child turns 18; after 18, the young person can apply for it themselves until the day before they turn 21.
Between the full CESG ($7,200) and the full Learning Bond ($2,000), that’s up to $9,200 in government money per child — without counting investment growth.
How to open one
You need two things: a child with a Social Insurance Number, and a promoter. Most banks, credit unions, and online brokerages offer RESPs. If you want to pick your own investments (GICs, ETFs, mutual funds), open a self-directed RESP at a discount brokerage. If you’d rather not think about it, a bank or credit union’s managed RESP or a robo-advisor RESP will do the job.
Once the account is open, your promoter applies for the CESG and the Learning Bond on your behalf — you don’t file a separate application with the government. Then contribute before December 31 to earn this year’s grant.
FAQ
Do I need to contribute the full $2,500?
No. Any contribution earns a 20% grant. $2,500 is simply the amount that earns the maximum $500. Contribute what you can — and catch up later if you need to.
Can grandparents contribute?
Yes. Anyone can open or contribute to an RESP for a child. Just keep the combined total across all accounts under the $50,000 lifetime limit per child.
Is the RESP worth it if my child is already a teenager?
It can be, especially with catch-up contributions earning up to $1,000 in CESG per year. But watch the age-16/17 eligibility conditions, and remember grants stop at the end of the year they turn 17.
Can the money be used for schools outside Canada?
Yes, at eligible foreign institutions — generally universities with programs of at least 3 consecutive weeks, or other institutions with programs of at least 13 consecutive weeks. Confirm eligibility with your promoter before counting on it.
What happens to the grants if we have more than one child?
In a family plan, contributions and earnings can be shared between siblings, but the $7,200 CESG lifetime cap is still tracked per child.
Can I move an RESP to a different provider?
Yes — RESPs can be transferred between promoters. Some providers charge transfer-out fees, so ask before you move.
The bottom line
The RESP is the rare financial product where the government pays you to participate: a guaranteed 20% return on up to $2,500 a year, plus a possible $2,000 bond if your income qualifies. The only hard deadline that matters this year is December 31, 2026 — get this year’s contributions in before then, and you’ll never leave free money on the table.