GetSmarterAboutMoney.ca provides a comprehensive guide to Registered Education Savings Plans (RESPs), a government-registered savings vehicle designed to help Canadians save for post-secondary education including university, college, and other designated educational institutions. The resource explains the three types of RESPs (individual, family, and group plans), how contributions work, and investment options such as stocks, bonds, mutual funds, and GICs. Students and families can open RESPs through financial institutions or scholarship plan dealers, with savings growing tax-free while in the account.
Resource details
- Contribution Limit: Lifetime contribution limit of $50,000 per beneficiary
- Plan Duration: RESPs can stay open for up to 36 years (40 years for beneficiaries eligible for the disability tax credit)
- Provider Types: Financial institutions (banks, credit unions, mutual fund companies, investment firms, trust companies) and scholarship plan dealers
- Cooling-Off Period: 60-day withdrawal right for scholarship plan dealer contracts
Why it’s worth exploring
Finance and accounting students need to understand RESPs not only as potential beneficiaries funding their own education, but also as a core component of Canadian tax-advantaged savings vehicles they’ll advise clients on in future careers. The resource provides detailed information on government grants including the Canada Education Savings Grant (CESG) which matches contributions by 20% up to $500 annually (lifetime maximum $7,200 per child) and the Canada Learning Bond (CLB) for lower-income families. Understanding the tax implications, contribution rules, and fee structures of different RESP types is essential knowledge for students pursuing careers in financial planning, wealth management, or accounting.
Going in prepared
Students should use the page’s RESP calculator to estimate education savings needs and familiarize themselves with key terminology including subscriber, beneficiary, educational assistance payments (EAPs), and promoter roles. Pay particular attention to the differences between individual, family, and group plans, especially the higher fees and more restrictive rules associated with group plans offered exclusively by scholarship plan dealers. If considering opening an RESP for yourself or understanding how clients’ plans work, note that contributions grow tax-free but are not tax-deductible, and understand the annual CESG contribution room carries forward until age 17.
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