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Designed to help you save money for a child’s post-secondary education, RESPs are a tax-effective, government-supported savings program. Investments within an RESP grow tax-free until the money is withdrawn.
Accessing Funds
The beneficiary can withdraw funds from the plan once he or she is enrolled in a program at an approved post-secondary educational institute that lasts for at least three weeks and has at least 12 hours per month of courses.
The amounts can only be withdrawn to cover educational expenses (tuitions, books, living expense) and a maximum amount may apply depending on the number of hours of course work and how long the beneficiary has been enrolled in the program.
Contributions can be withdrawn at any time. If contributions are withdrawn for non-educational purposes, you must repay some or all of the grants to the government.
If the beneficiary decides to not pursue a post-secondary education, the funds may be:
- transferred to another beneficiary (conditions apply)
- transferred to your RRSP if you have contribution room (conditions apply)
- taken as cash net of a penalty tax (conditions apply)
