Choosing an RESP provider

The company that sets up your RESPRESP See Registered Education Savings Plan.+ read full definition is called the plan provider or promoter. RESPs from a financial institution — like a bank, trust companyTrust company A company that offers the same services as a bank, but can also manage estates, trusts and pension plans, which banks cannot do.+ read full definition or mutual fund dealerMutual fund dealer A company that buys and sells the shares or units of mutual funds for investors.+ read full definition — work a lot like any other investmentInvestment An item of value you buy to get income or to grow in value.+ read full definition accountAccount An agreement you make with a financial institution to handle your money. You can set up an account for depositing and withdrawing, earning interest, borrowing, investing, etc.+ read full definition. RESPs offered by scholarship planScholarship plan A type of Registered Education Savings Plan (RESP) that pools together the money of many investors. An investment manager invests the money for you, often in lower-risk, fixed-income investments such as bonds and GICs. Enrolment fees are often high and there may be strict rules.+ read full definition dealers are set up differently and have different rules.

8 questions to ask

1. What fees are you expected to pay? When do you have to pay them?
2. Do you have to make regular contributions? If so, what happens if you miss a contributionContribution Money that you put into a savings or investment plan.+ read full definition?
3. What investment optionsOptions An investment that gives you the right to buy or sell it at a set price by a set date. The buy right is termed a “call” option, and the sell right is termed a “put” option. You buy options on a stock exchange.+ read full definition are available?
4. When and how will payments be made from the plan?
5. What kinds of post-secondary programs qualify?
6. Are the plan’s rules more restrictive than the government’s rules on which programs qualify? Find out which programs may qualify.
7. What happens if your beneficiaryBeneficiary The person(s), institution, trustee or estate you choose to give money, property or other benefits when you die. You may name beneficiaries in your will, insurance policy, retirement plan, annuity, trust or other contracts.+ read full definition doesn’t continue with their education after high school?
8. What happens if you want to cancel the plan? Is it easy to get your money out? Will you have to forfeit your earnings?

Learn more about choosing an RESP provider.

Who offers RESPs

Take a look at this list of RESP providers in Canada. It also tells you which government grants each provider offers.

4 questions to ask

1. What are the fees?
2. What are the rules for getting payments?
3. What happens if your child doesn’t continue their education?
4. What happens if you want to cancel the plan?

Caution

You have 60 days after signing your contractContract A binding written or verbal agreement that can be enforced by law.+ read full definition to cancel plans provided by scholarship plan dealers without any penalty. Be sure to read and understand the rules outlined in the short Plan Summary provided in the plan prospectusProspectus A legal document that sets out the full, true and plain facts you need to know about a security. Contains information about the company or mutual fund selling the security, its management, products or services, plans and business risks.+ read full definition.