What is an RESP?

A Registered Education Savings Plan (RESP) allows you to save tax-free towards post-secondary education. There are three different types of RESPs that you can open. The option that will be best for you will be dependent on the number of beneficiaries, the age of your beneficiaries and your need for flexibility in the plan. This infographic will help you understand the different types available.

Types of RESPs

Individual plans

  • Anyone can open an individual plan and contribute to it.
  • This plan is intended to pay for the education of one child.
  • If the intended beneficiary doesn’t pursue education after high school, you may be able to name an alternative beneficiary.

Family plans

  • Designed for families with two or more children. You can name multiple beneficiaries as long as they are related to the contributor.
  • The beneficiaries must be under 21 when added to the plan.
  • You are able to distribute the education funds as needed. If one child does not attend post-secondary school, the money can be used for another beneficiary.

Group plans

  • Can be opened for one child and they don’t need to be related to you.
  • The money is pooled with other investors’ contributions.
  • Only offered by scholarship plan dealers.
  • Often have higher fees, are usually more restrictive regarding regular contributions and can require a minimum initial deposit.
  • Have detailed contracts that should be carefully reviewed before opening.

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