The RESP Advantage: How CST Can Help you Save for Your Child’s Post-Secondary Education

One of the greatest gifts we can give our kids is the gift of education: making a plan when they are young to be able to help fund their education after high school.

With just a little savvy spending and saving on our part throughout their childhood, we can offer them the ability to pursue a post-secondary education of their choice and dreams, relieve them of the burden of debt to pay for that education, and open up more opportunities for knowledge and career paths.

But deciding on the best way to save for higher learning can be overwhelming. There are a lot of options for where and how to invest your savings, but not all investment options are created equal.

For most families, the best choice is using a dedicated education savings vehicle like a Registered Education Savings Plan (RESP).

Benefits of an RESP

RESPs are the only education savings accounts designed for the express purpose of funding post-secondary education. They make it easy to give the gift of higher learning while making the most from every dollar you put aside.

For starters, you don’t pay tax on any investment earnings as long as they stay in the RESP. Plus, RESPs give you access to a federal government matching grant program, adding 20% on the first $2,500 you put into your RESP each year, to a maximum of $7,200 per child.  Depending upon where you live, you may be eligible to receive additional provincial grants and incentives.

Flexibility when you need it

 Anyone can set up a group or individual RESP for your child and friends and family can help your savings grow more quickly by contributing directly into your plan.

RESPs can be used for a range of education options after high school too: community colleges and universities, vocational, technical, trade and religious schools, and distance learning and correspondence courses are all eligible ways to use your RESP.

And importantly, opening an RESP is easy: most financial institutions can start one for you, including any bank, investment advisor or money management firm. With any of these providers, you’ll get the same benefits of using an RESP to save your money.

But there are some extra advantages in choosing a dedicated RESP provider to consider.

RESP providers: the CST advantage

Group RESP companies like CST Consultants Inc. (CST) specialize in managing these accounts and helping investors create their post-education savings goals and plans. This is their area of expertise, so you’ll have access to knowledgeable professionals and reliable savings strategies throughout the life of your investment.

The Canadian Scholarship Trust Foundation in particular, is one of the largest and oldest RESP providers, having helped families across Canada with saving for the costs of post-secondary education since 1960. A not-for-profit organization, the Foundation aims to make education savings easy to understand while delivering low risk, hassle-free RESP solutions through CST.

Further, choosing CST as your RESP provider offers several advantages:

Principal Protection

CST won’t take unnecessary risks with your principal investment – your RESP principal (contributions less sales charge and applicable fees) is invested in stable and secure fixed-income securities such as government and financial institution bonds. Once your student is ready to attend post-secondary school, CST will return your principal – it’s as easy as that.

Pooled savings

CST manages more than $4.7 billion in assets for more than 254,000 Canadian families (as at October 31, 2017). Pooling your money with other families lets you benefit from professional investment management affordably rather than investing on your own.

Prudent money management

The portfolio managers that CST uses are rated among the Top 40 institutional money managers in Canada by Benefits Canada. They buy and sell with two goals: protecting your principal and delivering a positive return on your investment.

Sales charge refund and group plan bonus

Canadian Scholarship Trust Group Savings Plan 2001 is the only group RESP that has a funded sales charge refund account. You will get back 50% of the sale charges you paid, at the start of your plan, if your child collects all four of their Educational Assistant Payments. Plus, qualified students receive a bonus on top of their investment income after maturity.

Flexible options

You can use a CST RESP almost anywhere – in Canada and around the world – starting from the first year of your child’s study. And if your child decides higher education is not for them, CST gives you the option to move your principal and income into a self-determined plan up until your child is 20 years of age. From there, you may have several possible options open to you.

 Commitment to communities

The Foundation does a lot of good work in communities across Canada. As of 2017, they’ve presented Canadian students with almost $2M in awards, scholarships and bursaries, and awarded over $700,000 to fund new learning programs and activities for children. The Foundation has also donated over $71 million to their group RESPs since 1987

Simple, stress-free saving that works

With RESP companies like CST, you simply decide how much you want to contribute and they take care of the rest.

As a busy parent, that’s a hassle-free offer hard to refuse: simple, stress-free steps towards a major goal for our kids’ future and the ability to give the gift of a education. If only all parenting could be this easy!