KidsInTheHouse the Ultimate Parenting Resource
Kids in the House Tour

How to Choose the Right RESP Provider for Your Family

resp program

If you’ve started looking into registered education savings plans (RESPs), then you’ve made the first step towards securing your child’s educational future. However, what you’ll quickly come to realize through online searches is that there is more than one provider for such plans, and choosing the right one can be challenging. However, you can undoubtedly narrow down your options by considering the following information.

RESP Options

Every family dynamic is different, so it certainly helps if RESPs cater to those different dynamics. Find a provider who caters to your unique situation with a suitable plan. Some parents with only one child may find that an individual savings plan is all they need. However, multi-child households may benefit from a family saving plan with more flexibility. Before signing up with your provider of choice, make sure they have the very plan that’s going to suit your family the best.

Fee Structures

Part of choosing the right RESP provider in Canada involves doing your homework around their fee structures. Be wary of those who offer ‘fee-free’ RESPs, as that’s unlikely to be the case. Even if there is no outright fee, some providers distribute lower returns to cover their costs.

Some of the most popular fee structures that RESP providers outline are plan fees and management expense ratios (MERs). If you can’t find this information on their website, don’t be afraid to contact them to find out more. Plan fees typically incorporate an annual account maintenance fee and a one-time sales fee. How much this is can depend on the plan you choose. MERs come into effect when you invest in mutual funds. This fee incorporates payment for a portfolio manager and covers expenses such as record keeping, audit and legal fees, and fund valuation costs.

Deposit and Withdrawal Process

Secondary school students transitioning to post-secondary education are under a great deal of stress. The last thing you want to do is add to that by making it challenging for them to access the funds they need to begin their studies. While looking for a new RESP provider, look at their deposit and withdrawal options. Find out how easy it is to set up and make payments before finally withdrawing your money when the time is right.

Many providers make the process easy by taking automatic contributions from your bank account and sending you annual statements. When the time comes for your child to attend post-secondary education, you can make contact and withdraw your contributions or receive Education Assistance Payments (EAPs) in four installments.

Easy Contact

It shouldn’t be complicated to access the money you put away for your child’s education. It also shouldn’t be challenging to speak to someone if you have any questions or concerns. Therefore, always consider transparency and ease to contact when applying for an RESP.

Pay attention to their website and how many contact avenues there are for you to take advantage of. If you make contact through any of those options, consider the length of time you had to wait for a response. Being able to get all the information you need quickly from an RESP provider may offer the confidence you need to make a decision.

Reputation and Reviews

As tempting as it can be to choose the first RESP provider you see on a search engine, it pays to do your homework first. Talk to friends and family about their providers, or check out online reviews. For example, if you see CST Consultants appear as an option, visit their “CST RESP Reviews” page to determine just how many people are happy with the plan variety, deposit and withdrawal processes, and level of service.

Government Grant Opportunities

With a trustworthy, high-quality RESP provider in Canada, you should be able to access some of the best government grants in the country. Government grants allow you to access extra money to put towards your child’s post-secondary education. Over the plan’s lifetime, thousands of dollars can be added, tax-free, to their fund so they can pursue their career dreams.

Where you live can also make a significant difference to the type of grants you can receive. Throughout Canada, you may be eligible for the Canada Education Savings Grant (CESG), a grant offered by the government of Canada. It matches 20% of the first $2,500 you contribute to your child’s RESP, equating to $500 annually, or up to $7,200 over the course of the plan. Your RESP provider will help you apply for federal and provincial grants depending on your eligibility.

  • British Columbia Training and Education Savings Grant

  • Additional CESG

  • Canada Learning Bond (CLB)

  • Quebec Education Savings Incentive (QESI)

  • Additional QESI

  • Saskatchewan Advantage Grant for Education Savings (SAGES)

Choosing the right RESP provider may seem like a complicated process, but it doesn’t have to be. When your child is young, browse through the available options online and read their information thoroughly. If they tick all the boxes for these points above, there’s every reason to believe you’ve made the right choice.