RESP Rules

• You can invest up to a lifetime maximum of $50,000 per child.
• Under a family plan, you can name as many beneficiaries* to the plan as you want.
• Contributions can be made for up to 21 years, and the plan must be collapsed within 25 years of the end of the year it starts.
• Contributions are not tax deductible, so they may be withdrawn tax-free at any time.**
• The income within the RESP grows on a tax-sheltered basis and is paid out in the form of Educational Assistance Payments (EAPs) to qualifying beneficiaries in whose hands the money is taxed. In most instances, there will be little or no tax to pay.
• To use the accumulated income in an RESP, beneficiaries must attend an accredited post-secondary institution on a full-time basis. The program must be no less than three consecutive weeks (13 weeks if the educational institution is outside Canada) with at least 10 course hours per week. Correspondence courses qualify, as do universities, community colleges, junior vocational and technical colleges, as well as many universities outside Canada.
• Part-time students will be allowed to access up to $2,500 of their income and grants for each 13 week semester. Students will be required to be enrolled in a qualifying education program for at least 12 hours a month, in a course lasting at least three consecutive weeks.
• If the designated beneficiary does not pursue post-secondary education, another eligible beneficiary can be designated.
• If the beneficiary does not pursue post-secondary education, and there is no other beneficiary, the contributor may withdraw the earnings if certain requirements are met.

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The information contained herein is considered accurate at the time of posting. CIBC and CIBC World Markets Inc. reserve the right to change any of it without prior notice. It is for general information purposes only.

*In the case of a family plan (multiple beneficiaries), beneficiaries must be blood or adopted relatives of the contributor. Blood relations include children and grandchildren but do not include nieces or nephews.

**In some cases, a percentage of the Grant may have to be repaid to the Government where contributions have been withdrawn.