InfoCapsule : Life cycle of a Registered Education Savings Plan (RESP)

Disclaimer: RESP promoters

The information contained on this page is technical in nature and is intended for Registered Education Savings Plan (RESP) and Canada Education Savings Program promoters. For general information, visit the RESP section.

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3. Life cycle of a Registered Education Savings Plan (RESP)

The life cycle of an RESP can be broken down into three phases:

Phase 1: Setting it up

  • The subscriber selects an RESP promoter, opens an RESP and names a beneficiary
  • The promoter gathers information on the beneficiary, the subscriber and the primary caregiver, their cohabiting spouse or common-law partner (if applicable), and reviews eligibility criteria
  • The subscriber signs a contract with the promoter and chooses how to invest their funds
  • The subscriber, with the promoter, completes the Canada Education Savings Program (CESP) application form and annexes to request the education savings incentives for which the beneficiary may be eligible
  • The Canada Revenue Agency (CRA) registers the plan
  • Within 90 days, the promoter informs the beneficiary’s custodial parent or legal guardian that a plan was established

Phase 2: Making it grow

  • The subscriber may contribute to the RESP in respect of a beneficiary
  • The promoter submits RESP transactions to the CESP system
  • The RESP may receive education savings incentives
  • Contributions and education savings incentives in the RESP may generate earnings
  • At least once a year, the promoter must inform subscribers, in writing, on the status of their RESP account
  • The custodial parent coordinates the contributions with subscribers to avoid overcontributions
  • The custodial parent has access to information on all RESPs held by ESDC for their child

Phase 3: Taking out the funds

For post-secondary education

  • The promoter must obtain the beneficiary’s proof of enrolment to issue an educational assistance payment (EAP)
  • The subscriber may request an EAP
  • The subscriber may withdraw their contributions as a post-secondary contribution withdrawal

When terminating an RESP

  • Education savings incentives administered by ESDC that remain in the plan must be repaid
  • Contributions are returned to the subscriber, tax free
  • The options available to disburse the remaining earnings in the RESP are to:
    • request an accumulated income payment (AIP)
    • rollover the AIP amount into another qualified registered product
    • make a payment to a designated educational institution in Canada
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