RESP terms in plain language

RESP

Registered Education Savings Plan

A registered account used to save for a beneficiary's qualifying post-secondary education. Contributions are not tax-deductible, but investment growth can be tax-deferred while it stays in the plan.

Watch for: People often say RESP when they mean the account, the money inside it, or the provider. Those are related but not identical.

Subscriber

Plan owner

The person who opens and controls the RESP, makes contributions, chooses the provider, and requests withdrawals.

Watch for: The subscriber is usually a parent or grandparent, but the beneficiary is the student.

Beneficiary

Student named in the plan

The person whose education the RESP is meant to support.

Watch for: A family RESP can have more than one beneficiary if the plan and family relationship rules allow it.

Promoter

RESP provider

The financial institution or organization that offers and administers the RESP.

Watch for: Promoter is the official government word. Readers usually call this the provider, bank, brokerage, robo-advisor, or group-plan company.

CESG

Canada Education Savings Grant

A federal grant that usually adds 20% on eligible RESP contributions, subject to annual and lifetime limits.

Watch for: CESG is separate from your own contributions and separate from investment returns.

Additional CESG

Extra CESG for eligible lower- and middle-income families

An extra federal grant rate on part of the annual contribution when family income and eligibility rules qualify.

Watch for: It does not increase the lifetime CESG maximum. It changes how quickly some grant room can be used.

CLB

Canada Learning Bond

Federal RESP money for eligible children from lower-income families. It can be available even if the family does not contribute.

Watch for: CLB is often confused with CESG. CESG depends on contributions; CLB can be paid without contributions.

Grant room

Unused CESG eligibility

Eligible CESG amounts that were not received in earlier years and may be catch-up eligible later, subject to rules and limits.

Watch for: Grant room is not the same as contribution room. The RESP contribution limit and CESG limits are different.

Contribution

Subscriber's after-tax money

Money put into the RESP by the subscriber or another contributor. It counts toward the beneficiary's lifetime RESP contribution limit.

Watch for: Contributions can usually be withdrawn tax-free by the subscriber, but withdrawing them can affect grants if the student is not in eligible schooling.

Earnings

Investment growth inside the RESP

Interest, dividends, distributions, and capital gains earned by investments in the plan.

Watch for: Earnings are not the same as contributions. When paid for school as part of an EAP, they are taxable to the student.

EAP

Educational Assistance Payment

A taxable withdrawal for the beneficiary that comes from grants, bonds, and investment earnings once the beneficiary is in eligible post-secondary education.

Watch for: An EAP does not include the subscriber's original contributions.

PSE withdrawal

Post-secondary education contribution withdrawal

A withdrawal of the subscriber's original contributions while the beneficiary is in eligible post-secondary education.

Watch for: This is different from an EAP because it is a return of contributions, not grant or earnings money.

AIP

Accumulated Income Payment

A withdrawal of RESP investment earnings to the subscriber when RESP education use is not available and strict conditions are met.

Watch for: AIPs can be heavily taxed unless rollover rules are available and followed.

Group RESP

Pooled or scholarship-plan style RESP

A plan structure where contributions may be pooled or tied to a schedule, often with different fees and rules than bank, brokerage, or robo-advisor RESPs.

Watch for: Group plans can have important contract restrictions. Read fees, cancellation rules, and missed-contribution rules carefully.

Self-directed RESP

Brokerage RESP

An RESP where the subscriber chooses investments such as ETFs, stocks, bonds, GICs, or mutual funds, depending on the brokerage.

Watch for: Not every self-directed provider supports every grant, provincial program, or account feature.

Managed RESP

Provider-managed portfolio

An RESP where the provider recommends or manages the investment portfolio, often through mutual funds, model portfolios, or a robo-advisor service.

Watch for: Compare management fees, investment costs, grant support, withdrawal process, and transfer fees.

$50,000 lifetime contribution limit

Maximum personal contributions per beneficiary

The lifetime limit for RESP contributions made for one beneficiary across all RESPs.

Watch for: Government grants and investment growth do not count toward this contribution limit.

Student aid

Loans, grants, and provincial aid programs

Government student financial aid, such as Canada Student Grants and Loans or provincial programs like OSAP.

Watch for: RESP treatment can vary by program and province. Check the student aid application instructions for the school year.