In some cases, you may want or need to withdraw money from your RESP for non-educational purposes.
While you may withdraw your contributions at any time without being taxed, the withdrawal of any income earned on your contributions from an RESP is taxed (that withdrawal is called an Accumulated Income Payment or “AIP”).
To withdraw your investment income, your RESP needs to have been open for at least 10 years, or your beneficiaries must be over the age of 21 and not currently pursuing a post-secondary education.
In addition, withdrawing your contributions may also result in the government clawing back grants that it had previously contributed to your RESP, so it is wise to be aware of such implications.
Grants and the income you earn on them will also need to be returned to the government if it is not used while your child is in post-secondary school.
For more information on what you can and can’t do, please take a look at the CRA’s website.