Many Registered Education Savings Plans (
RESPs) allow you to choose how much you want to save and when, but there are limits. You cannot contribute more than $50,000 in total for one child. That also includes money from other family members and friends. It does not include any grant money the government adds to your RESP savings.
How often can I contribute? You can choose:
- A lump sum whenever you have extra cash. For example, parents may contribute their tax refund money. Grandparents may put money into a grandchild’s RESP as a birthday gift.
- Regular withdrawals, called Pre-Authorized Debits (PADs), from your bank account.
This chart compares the advantages and drawbacks of each method.
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Advantages |
Drawbacks |
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PADs |
- PADs help you stick to your savings plan. The money comes right out of your bank account before you can spend it on something else.
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- People whose income goes up and down, such as salespeople who make commissions, find it harder to set aside money for regular contributions.
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Lump sum contributions |
- You are in control of when and how much money you put in, based on your financial situation.
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- It may be harder to stick to your savings plan.
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Tip: A lump sum at the start of each year gives your money more time to grow. Let’s say you contribute a lump sum of $1,800 at the start of each year. Your RESP could be worth about $4,000 more by the time your child is ready for further studies than if you contributed monthly.
What happens if I miss a contribution? In most cases there’s no problem. You can always miss a payment, or change your contribution level.
- With some RESPs, you must stick to a payment schedule. Group Scholarship Plans often work like this. Why? The plan works out the number of units you get very carefully, based on the number of payments you will make over the years.
- With some Group Scholarship Plans, you may be able to change your contribution schedule. However, if you miss a payment, you may have to pay a penalty or even leave the plan.
Remember: Some RESPs are more strict about contributions.
Before you open a plan, make sure you understand what happens if you fall behind or want to change your payment schedule.