RESP Withdrawal Question

Bassam · 2025-09-14T14:36:46-0400

I've been contributing to my children's RESP for several years, and the account has grown substantially—it's now worth more than twice my original contributions, thanks to investment growth and government grants. My children are still a few years away from starting university; they're currently 14 and 10.
Given a recent change in my financial situation, I'm considering withdrawing only the amount I originally contributed, while leaving the grants and investment earnings intact. If my circumstances improve, I plan to resume contributions in the future.
Is it possible to make this kind of withdrawal without incurring any penalties? If so, what steps do I need to take to proceed?

OptsyEagle · 2025-09-14T16:00:53-0400

It is my understanding that if you withdraw any of your original contributions, for non-educational purposes, the administrator of the RESP is required to pay the CESG amounts, that were originally paid on those withdrawn contributions, back to the government.

So yes. There will be a 20% penalty on withdrawals of contributions for non-educational purposes.

Covariance · 2025-09-14T16:39:12-0400

Since your children are not enrolled in post-secondary there will be limitations. Also, possibly significant issues if you withdrawal all of your contributions. In the past this has resulted in immediate closure of the account if there is no child enrolled in post-secondary (not sure if this is still the case). There may also be rules your FI has put in place in addition to the rules imposed by Canada and your Province. Suggest you contact the FI that is holding your RESP and determine what is possible.

RESP Withdrawal Question

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