Natasha Macmillan, Business Unit Director - Everyday Banking
Opening an RESP is a relatively straightforward process. Before opening an account, it is important to begin by researching different financial institutions that offer RESPs. Compare their offerings, fees, investment options, customer service, and other factors to choose a provider that best suits your needs.
To open an RESP account, you will need to provide the following information to the provider:
- Your Social Insurance Number (SIN)
- The beneficiary’s SIN
- A government-issued ID
- A void cheque or bank information to set up contributions
Once the account is opened, you will need to establish a contribution plan. Determine the amount you can contribute regularly and set up automatic contributions, while keeping in mind any contribution limits or eligibility requirements.
An RESP, or Registered Education Savings plan, is a government-approved savings account specifically designed to help save for a child’s post-secondary education.
These accounts are typically opened by parents, in anticipation of their children’s future education expenses, particularly tuition fees. The federal government and some provincial governments offer grants to enhance RESP contributions. With these grants, you could potentially set aside even more funds for when your kids are ready to go to post-secondary education.
RESPs can be opened through most financial institutions and may hold a wide range of investments, such as stocks, bonds, and GICs. Most RESPs may remain open for a maximum of 35 years.
Types of RESPs
There are three main types of RESP plans offered by RESP companies and banks each with its own characteristics and benefits:
- Individual RESP: An individual RESP plan is specifically opened for one child (one beneficiary). It allows anyone, including non-parents, to open an RESP for a child.
- Family RESP: A family RESP account is designed to include multiple children as beneficiaries. This type of RESP is beneficial for families with more than one child, as it allows the funds to be shared among the beneficiaries.
- Group RESP: Some RESP companies offer a group RESP plan, which involves pooling together contributions from various investors for a specific maturity. This approach is intended to allow you to invest alongside others whose children have a similar birth date or targeted education age as your child.
When choosing the type of RESP that best suits your needs, consider factors such as the number of beneficiaries, your investment preferences, and the flexibility required in accessing the funds.