One of the best ways to save for your child’s post-secondary education is with a Registered Education Savings Plan (RESP). But what happens when grandparents, aunts, uncles, or even family friends want to pitch in and open an RESP for the same child? Can a child have more than one RESP? And if so, are there any risks?
Many parents worry about how multiple RESPs affect government grants, contribution limits, and overall savings strategy. The good news is that, yes, a child can have more than one RESP, but there are some important rules to keep in mind. Here’s what you need to know.
Individual vs. Family RESPs
A RESP is a tax-advantaged savings account designed to help families save for post-secondary education. The two main types are individual and family RESPs:
- Individual RESP: Only one child is named as the eligible beneficiary. Anyone—parents, grandparents, other relatives, or even family friends—can open an individual RESP for the child.
- Family RESP: These allow multiple children (who must be related by blood or adoption to the subscriber) to share the savings. A parent or grandparent typically opens a family plan to manage education funds for more than one child in one account.
RESPs are flexible—parents, grandparents, guardians, and even friends can open accounts and contribute to a child’s education fund. However, while multiple people can contribute, only the subscriber (the person who opened the RESP) controls the account.
What Happens If a Child Has More Than One RESP?
An RESP can stay open for a total of 35 years. There’s no annual contribution limit, but there is a lifetime cap of $50,000 per child.
Since anyone can open an individual RESP for a child, it’s common for parents to open one while grandparents or other relatives open separate ones. However, if your child has multiple RESPs, keeping track of contributions is crucial.
While having multiple accounts can be a great way for different family members to help save for education, all RESP contributions are subject to the same lifetime contribution limit of $50,000 per beneficiary—regardless of how many RESP accounts exist. That means if multiple people are contributing to different RESPs, they need to coordinate contributions to avoid exceeding the limit.
For example:
- A parent contributes $30,000 to their child’s RESP.
- A grandparent contributes $20,000 to a separate RESP for the same child.
This would put the total contributions at $50,000 (which is fine). However, let’s say an aunt then contributes another $5,000. The child’s total RESP contributions will be $55,000—exceeding the limit by $5,000.
What Happens If You Over-contribute?
Going over the $50,000 limit results in a 1% tax per month on the excess amount.
So, in the example above, the aunt’s over-contribution of $5,000 would be taxed at $50 per month, meaning they would owe $50 every month until withdraw. Over time, this can add up to a significant penalty, making it essential to monitor RESP contributions carefully.
What Happens to Government Grants with Multiple RESP Accounts?
To maximize government grants like the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB), the best strategy is to contribute $2,500 per year to your child’s RESP. This ensures you get the full CESG match and stay within the lifetime contribution limit—helping you make the most of free government money.
But what if your child is the beneficiary of multiple RESP accounts? How does that affect these grants?
No matter how many accounts exist, the Canada Education Savings Grant (CESG) and Canada Learning Bond (CLB) follow the child—not the account, so the beneficiary will not receive extra government grants by having multiple accounts opened.
How the CESG Works Across Multiple RESPs
The CESG matches 20% of your contributions but only up to $500 per year (on the first $2,500 you contribute). Over time, a child can receive a maximum of $7,200 in CESG grants.
Even if multiple people open RESPs for the same child, the government won’t double up on grant money. Instead, the CESG is applied on a first-come, first-served basis—meaning whichever RESP receives eligible contributions first will get the grant. If another RESP later receives contributions, it will only receive the CESG available within the yearly maximum .
So, if both parents and grandparents are contributing to different RESPs for the same child, they should coordinate to avoid missing out on CESG grants.
Canada Learning Bond (CLB)
The CLB is a grant from the federal government available to lower-income families and provides up to $2,000 per child, starting with a $500 deposit and $100 each year until age 15, as long as they continue to qualify for it, based on income.
CLB money is deposited into an RESP every year for an eligible child, even if parents don’t contribute a dime. It’s designed to help lower-income families start saving for education without needing to put in their own money.
Like the CESG, the CLB is assigned to the child, not the account, and it can only be deposited into one RESP at a time. If multiple RESPs exist, the CLB will be paid into the first RESP that applies and meets the eligibility requirements.
Advantages of Having Multiple RESP Accounts
Having multiple RESP accounts for the same child can be beneficial in some situations, such as:
More Family Members Can Contribute
Parents, grandparents, and even family friends can open their own RESP for the child, making it easier for everyone to pitch in toward education savings. This allows contributors to maintain control over their own RESP without relying on a single subscriber.
Flexibility in Investment Choices
Different RESP providers offer different investment options. Multiple accounts let contributors choose different investment strategies to maximize returns. For example, one RESP could be invested in a conservative portfolio, while another could focus on higher-growth investments.
Disadvantages of Having Multiple RESP Accounts
While there are advantages to having multiple accounts, it also comes with challenges. Here are some possible disadvantages to consider:
Risk of Over-contribution
All RESPs for the same child share the $50,000 lifetime contribution limit. If multiple people contribute without coordination, there’s a risk of over-contributing, resulting in a 1% monthly tax on the excess amount.
Potential for Lost Grant Money
The CESG provides 20% on the first $2,500 contributed yearly—but only up to a maximum of $500 per year per child. You could miss out on grants if multiple accounts exist and contributions aren’t coordinated.
Additionally if a family member does choose to open an RESP for a child—like if an aunt opens one and starts putting in money—it’s important to be mindful. If the aunt later needs the money and takes it out for something other than school, the child’s ACESG will be impacted across all RESPs in their name. Once that grant money is taken away, it can’t be earned again, even if someone else opens a new RESP. The amount withdrawn will also reduce the $50,000 lifetime contribution maximum. So, if the aunt withdraws $5,000 the child’s contribution limit will reduce to $45,000.
The Canada Learning Bond (CLB) can only be deposited into one RESP, so having multiple accounts could lead to confusion over which one should receive the funds. If you have multiple RESPs and are eligible to receive CLB, contact your provider to ensure you are receiving all the grants you are entitled to.
Less Growth Potential
If accounts are smaller, they might not benefit from compound growth as effectively as a larger, consolidated account, which could mean lower long-term returns and missed investment opportunities.
More Work for You
Managing multiple accounts means tracking contributions, grant eligibility, and investment performance across different RESPs. This can be confusing and requires good communication between account holders to avoid errors.
Strategies for Tracking Contributions to Multiple RESPs
Since multiple Registered Education Savings Plans (RESPs) for the same child share the $50,000 lifetime contribution limit, careful tracking is essential to avoid penalties. Here are some strategies to keep everything organized and ensure you don’t accidentally over-contribute:
1. Communicate Regularly with Family Members
If parents, grandparents, or other relatives have opened separate RESP accounts, it’s crucial to coordinate contributions. You’ll want to sit down and have a family discussion about how much each person plans to contribute.
- Keep a Centralized Contribution Tracker
One of the easiest ways to avoid exceeding the lifetime limit is to create a simple spreadsheet or tracking system, like a shared Google Sheet. In this spreadsheet, you can track:
- Who contributed (parent, grandparent, relative, etc.)
- How much was contributed
- The RESP provider for each account
- The total contributions across all RESPs
3. Set Up Automated Contributions
Instead of making random lump-sum contributions, consider setting up automatic deposits—this helps regulate how much is going into each RESP each year. For example, you can set up a monthly contribution of $208.33 ($2,500 per year) to maximize the CESG grant.
4. Check Contributions with Your RESP Provider
Many RESP providers don’t track external contributions, meaning it’s up to the subscriber to monitor the total amount across different RESPs. You’ll want to periodically call your RESP provider to confirm your total contributions. Embark’s digital platform makes it easy to track your contributions online so you can make sure you’re on the right track.
5. Use Embark’s RESP Gifting feature instead of having multiple RESPs
With an Embark RESP, family and friends can contribute money directly to your child’s RESP through a unique gifting link. This eliminates the need to coordinate and manage the funding of multiple accounts for a single child. RESP Gifting streamlines family efforts into one easy-to-manage digital account.
Final Thoughts
Having multiple RESPs can be helpful if multiple family members want control over their own contributions. However, it can lead to missed grants, contribution tracking issues, and unnecessary fees without proper coordination.
If family members want to contribute, adding funds to an existing RESP through Embark’s RESP Gifting feature may be simpler than opening multiple accounts. However, if multiple RESPs are necessary, clear communication is key to ensuring that government grants are maximized and that contributions stay within limits.
