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Save for a child’s university or college costs through RESPs. (Photos.com)
Save for a child’s university or college costs through RESPs. (Photos.com)

Choosing an RESP

Opening an RESP Add to ...

6 steps to opening an RESP

1.  Get social insurance numbers

You will need your social insurance number to open an RESP. Your child or other beneficiaries will also need social insurance numbers and must be Canadian residents.

2. Shop around

Different RESP providers offer different types of plans with different rules and restrictions. Decide which plan best meets your needs – an individual, family or group plan. Find out who offers the plan and what your choices are.

Read Saving for your child’s education to compare the key features of individual, family and group plans sold by financial institutions and scholarship plan dealers.

3. Decide how to invest your savings

Your options will depend on the plan offered by your provider. Investments that qualify for RESPs include savings accountsGICsCanada Savings Bondsmutual fundsstocks and bonds.

You may want to open a self-directed RESP. With this type of plan, you can choose more than 1 type of investment. Ask about plan costs and investment costs before you decide.

Watch this video about how to decide which investments to hold in your RESP.

4. Understand the fees and penalties

Know how much the plan will cost. Are there sales fees or set-up fees, annual fees or penalties for making changes?

5. Read all the information carefully before you sign

Most plans will provide written information about how the plan works, rules, fees and penalties. By law, scholarship plan dealers must give you a prospectus, which describes the plan in more detail. Make sure you read and understand all plan documents before you sign the contract.

6. Open the RESP and apply for government grants

Your RESP provider will apply for the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB) on your behalf when you open your RESP. If you live in Quebec, Alberta or Saskatchewan, you may also be eligible for a provincial grant.

Content in this section is provided in partnership with Investor Education Fund, a non-profit organization founded and supported by the Ontario Securities Commission that provides unbiased and independent financial tools to help Canadians make better money decisions. To find out more, go to: GetSmarterAboutMoney.ca

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