Perhaps the most in-demand program for saving up for a child’s future education is an RESP (Registered Education Savings Program). This is an heritage education funds under Canada’s Tax Act, which greatly helps parents who want to secure their kid’s future education.
When it comes to RESP withdrawals, there are good ways to maximize the benefits you can get. Here are some of them.

1. EAP First
The moment your child reaches post-secondary level, and when he’s enrolled full- or part-time in a qualifying post-secondary educational program, you can request for Educational Assistance Payment.
EAPs are funds your account has accumulated through grants, bonds, and other investments. These are taxable funds, but since your child most probably has low marginal tax rate, it won’t hurt your budget too much.

2. Take Note of the Taxes
Aside from EAPs, there are other funds you can withdraw. For instance, you can withdraw funds from you accumulated contribution, which is the total amount of contribution you have made for the account.
Why accumulated contributions are sometimes better than EAPs is because these are non-taxable. Depending on your situation, you can time the withdrawals you make from EAPs and accumulated contributions.

3. Add the Contributions to EAPs
You can also add the contribution amounts you’ve withdrawn to the EAPs to help with your child’s educational fees.
However, bear in mind that if your original contributions have generated a matching government grant, and you have withdrawn them, the grant must be given back to the government.

4. Know the Limits on RESP Withdrawals
Remember that there’s a cap on initial withdrawals: you are only allowed to withdraw $5,000 of accumulated income during the first 13 weeks of your child’s post-secondary education using heritage RESP program.
Afterwards, the limit is removed and you can withdraw as much as you want. Meanwhile, there are no limits to the withdrawals from the overall contribution portion as long as your child is attending school.

5. Maximize the 35 Years
If your child doesn’t want to pursue his or her post-secondary education, you don’t have to demolish the account immediately. If you do, you’ll have to pay a pile of taxes on it.
Remember that you have quite a lot of time to finally ditch your heritage RESP. You can still keep your account open for as long as 35 years after the year you opened it. And there’s always the possibility of your child changing his or her mind about her education.

6. Family Plans: Don’t Over-withdraw
Having a family plan RESP account means you can name two beneficiaries under one account. Keep in mind you the lifetime grant limit for this type of account is up to $7,200 only.
If you exceed that limit for one beneficiary, the grants will be returned to the government. Typically, your RESP provider as heritage education funds will keep a record of how much grant each beneficiary has already received. It’s best to ask regular updates and change your withdrawals if you deem it necessary.

7. Prepare All Necessary Proofs

You don’t need receipts when requesting for EAPs and withdrawals. All you really need is proofs of enrollment, and voila! You can withdraw the funds. Just make sure that your child is eligible for funds like grants in order to avoid delays or even taxes.


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