There's a good chance someone has been saving money for your education since before you could walk.
If you're a teenager in Canada, there's a reasonable probability you have an RESP. A Registered Education Savings Plan. Your parents might have opened it when you were a baby. A grandparent might be contributing to one right now. And you may have absolutely no idea what's in it, how it works, or what it's actually worth.
That's worth fixing.
What an RESP Actually Is
An RESP is a government-registered savings account that parents, grandparents, or other family members open to save for your post-secondary education. The money inside grows tax-sheltered: investments earn returns year after year without triggering annual tax bills for your family. When you eventually withdraw the investment growth and government grants for school, that money gets taxed in your hands, not your parents'. Since most students have very little income, that usually means paying little to no tax at all.
The RESP has been around since the 1970s. The features that make it genuinely useful came later. Today it's one of the better savings tools the Canadian government offers, and the reason is the grant.
The Part Most People Don't Know About
The federal government matches your family's contributions.
The Canada Education Savings Grant (CESG) adds 20% to the first $2,500 your family contributes to your RESP each year. That's $500 of free money per year, per child. Over 14 years of contributions starting from birth, the maximum grant is $7,200.
That $500 does not come from anyone's paycheque. It comes from the federal government, deposited automatically into your account.
If your family has a lower income, there may be additional grants available through the Canada Learning Bond or an enhanced CESG rate. These do not require extra contributions. They're just added on top.
The lifetime contribution limit is $50,000 per beneficiary.
How to Actually Use Your RESP When School Starts
When you're enrolled in a qualifying post-secondary program, you can start withdrawing from the RESP. There are two types of withdrawals, and they work differently.
PSE withdrawals (Post-Secondary Education withdrawals) return the original contributions your family put in. This money was contributed with after-tax dollars, so when it comes back out, it comes back tax-free. Your family receives this portion directly.
EAP withdrawals (Educational Assistance Payments) are the government grants and the investment growth the account has accumulated. This portion gets paid to you, the student. It counts as your taxable income for the year.
Here's why that's not usually a problem: the federal basic personal amount means that most full-time students with no significant other income end up owing little to no federal tax on EAP withdrawals. You're likely earning well under the threshold that would trigger a real tax bill. And if you're working part-time, your T4 income and RESP withdrawals can still come in under the personal amount in many cases.
You can use RESP money for tuition, books, rent, groceries, and general living costs while you're in school. There is no requirement to spend it line-by-line on specific educational expenses.
What Programs Qualify
The list is broader than most people assume.
University degrees qualify. College diplomas and certificates qualify. Apprenticeships and skilled trades programs qualify. Part-time programs qualify. Some programs at foreign schools qualify as well, provided the program is at least 13 consecutive weeks long.
If you're applying for OSAP (Ontario Student Assistance Program) or another provincial student aid program, receiving RESP withdrawals does not automatically eliminate your eligibility. The specifics depend on the province and program. It's worth a conversation with your school's financial aid office in the semester before you first withdraw.
What Happens if You Don't Go to School
This is the question worth knowing the answer to before you need it.
If you decide not to pursue post-secondary education, the RESP does not simply disappear. Here's what happens to each piece:
Your family gets their original contributions back with no penalty. If they put in $20,000 over the years, they get $20,000 back. No tax, no loss.
The government grants (the CESG and any related grants) go back to the government. You don't keep the grant money if the RESP isn't used for education.
The investment growth the account earned over the years is called accumulated income. If your family takes this out without rolling it into another registered account, it gets added to their income for the year and hit with an additional 20% penalty tax on top of the regular rate. That's a significant hit.
There is a way to avoid that penalty: if your parents have unused RRSP contribution room, they can transfer up to $50,000 of accumulated income directly into their RRSP. No 20% penalty applies on the transferred amount.
Two other options worth knowing: if you have a sibling, your parents can change the beneficiary on the account to that sibling, and the money stays in the RESP for their education. And the account can stay open for a long time. An RESP must close by the end of the 35th year after it was opened. If you take a few years off, start school later than expected, or go back for a second credential in your mid-twenties, the money can still be there for you.
What to Do Right Now
There is one step that matters more than anything else in this article.
Ask your parents if you have an RESP and what's in it.
Many teenagers have never had that conversation. Some families opened an RESP and contributed consistently for years. Others opened one and forgot about it. Some families never opened one at all. You won't know until you ask.
If you do have one, find out what institution holds it, how much is in it, and what it's invested in. Ask whether contributions are still happening. That conversation takes ten minutes.
If you don't have one, the CESG is only available until the end of the calendar year in which you turn 17, with some conditions. If you're 16 or younger, there's still time to capture some of the grant. A bank or investment platform can walk you through what's possible given your age and the account's history.
The RESP is one of the few places where the government puts real money into your account alongside your family's savings. Most teenagers find out about it when they're already sitting in a registrar's office wondering how to pay for their first semester.
Don't be that person. Ask now.