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Education Centre:
What is a Registered Education Savings Plan (RESP)?
 A Registered Education Savings Plan (RESP) is a tax-deferral savings plan
that you may open on behalf of a child for future post-secondary education.
- Although RESP contributions are not tax deductible, income
earned on contributions compounds on a tax-deferred basis.
- RESP contributions qualify for a Canada Education Savings
Grant - the government will contribute an additional 20% of your RESP
contributions to a maximum grant of $400 a year.
- You may contribute up to $4000 a year per beneficiary, up to a 21
years - a lifetime maximum of $42,000 per individual.
- RESP contributions may be withdrawn at any time with no tax
consequences - only accumulated income in the plan is taxable.
- Money withdrawn from an RESP to pay for education-related costs, is
taxed in the hands of the beneficiary (the student). If withdrawn over
a
few years, the income should attract little or no tax.
- If a child does not attend post-secondary school, RESP
contributions may be withdrawn with no tax consequences - only
accumulated income in the plan is taxable. Up to $50,000 of RESP
income may be transferred to the contributor’s RSP, if there is
allowable contribution room.
- Learn more about RESPs at ATB Financial.
For more information about our service or solutions, call us (toll-free) at 1-888-ATB-3863, or contact any branch of ATB Financial. For the branch hours and address of the ATB Financial location nearest you, please use the Branch Locator.
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