If your RESP is with a financial institution
- Opening a plan – There is usually no charge to open an RESPRESP See Registered Education Savings Plan.+ read full definition. Some institutions may charge a small set-up fee.
- Annual administration feeAdministration fee The fees you pay to a financial institution for activities related to the operation of the account.+ read full definition – There are often no annual fees for RESPs opened at a bank or a mutual fund companyMutual fund company An investment company that pools money from investors and invests it in a mix of investments, such as stocks, bonds, and money market investments. Most mutual fund companies offer a choice of more than one fund.+ read full definition. The cost of other plans can vary. You may not have to pay an annual feeAnnual fee A fee that is charged on an annual basis. One common occurrence of an annual fee is the fee charged by credit cards.+ read full definition if you have enough savings in your plan, or if you hold other accounts with the same financial institution.
- InvestmentInvestment An item of value you buy to get income or to grow in value.+ read full definition costs – You pay a commission when you buy stocks for your plan and when you sell them. You may pay a sales charge when you buy mutual funds for your plan or when you sell them. You’re also charged a management expense ratio (MER) for the mutual funds you hold.
- Other costs – Most plans charge fees for special services. Examples: changing your beneficiary, transferring money to another RESP.
Ask about waiving the annual fee
Your financial institution may agree to do this if you hold other accounts there or if you have enough savings in your plan.
If your RESP is with a scholarship plan dealer
- Sales fees or commissions – Also called membership or enrolment fees. The salesperson and the company they work for get a sales fee when you open a plan. If you leave the plan early or your child doesn’t continue with their education after high school, you will not get back the sales fees you paid, unless you cancel within 60 days after signing your contractContract A binding written or verbal agreement that can be enforced by law.+ read full definition.
- Annual fees – These may include administration fees, trusteeTrustee A person or company that you appoint to manage the assets of a trust. You can name more than one trustee.+ read full definition fees and deposit fees.
- Other costs – Most plans charge fees or penalties for special services. Examples: taking out contributions early, transferring money to another RESP, changing 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. If you have a group plan, you may pay a fee to change your payment schedule. Read 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 to understand the full cost of an RESP sold by a 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 dealer. The prospectus is a legal document that describes how the plan works.
If you change your mind
For all plans offered by scholarship plan dealers, you have the right to withdraw all of your money within 60 days after signing your contract if you change your mind. Be sure to read and understand the rules outlined in the short Plan Summary provided in the plan prospectus. After 60 days, you can get your money back, less any fees.
Comparing RESP fees
|Financial institutions||Scholarship plan dealers|
|Fees to open an 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||Sometimes||Yes|
|Direct costs when you buy investments||Often||No|
|Fees or penalties for special services||Yes||Yes|
You have 60 days after signing your contract 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 prospectus.
4 questions to ask
- Are there sales or set-up fees?
- Are there annual administration, trustee or deposit fees?
- Are there fees for buying and selling investments?
- Are there penalties for making changes?