What is an RESP?

A Registered Education Savings Plan (RESP) is a dedicated savings plan for parents, guardians, or other contributors who want to save money for a child's post-secondary education. An RESP is a financial tool that helps the money you set aside grow  tax-free in the plan and gives you access to government grants. More importantly, this tool empowers your child to follow their dreams and passions without worrying about financial debt!

A subscriber, the person who opens an RESP, can contribute up to $50,000 for each RESP beneficiary. Savings can be made in lump sum payments or through monthly contributions. Some plans will require regular monthly or annual contributions. Many people find this gives them the discipline to attain their education savings goals. Talk to a CST Sales Representative for more information about the available plans and to help you start your CST RESP!

Earn Tax-free income in the plan
An RESP is a great way to maximize your savings. All the interest and investment returns grow tax free in the plan. When the money is withdrawn, the income is taxable at the student's rate – not the contributor's. Since students usually have little or no other income, those taxes will likely be minimal.

Boost your savings with government grants                                                                                                                  Another key advantage of putting your money into an RESP is the money that the government will contribute to your child’s savings in the form of education savings grants. The federal grant is called the Canada Education Savings Grant (CESG), and the government will match 20% of your investment, up to $500 annually. They will contribute up to $7,200 for your child's post-secondary education over the lifetime of your plan. Certain provinces such as Quebec and British Columbia also offer provincial grants to boost your RESP savings.

How your RESP works                                                                                                                                                        The money that is accumulated in an RESP can be used to pay for more than just your child's school tuition. Just as long as the beneficiary is registered in an eligible educational institution, they can use the funds to cover books, accommodation, travel, and other needs a post-secondary student may have.

An RESP plan can remain open for 36 years, so your child won't be pressured into making snap educational choices. They have the freedom to take some time after high school to decide what they want to study and where they wish to further their education.

At the same time, you'll have the peace of mind that comes from knowing that when your child is ready for their post-secondary education, you’ll be ready to help pay for it. They can kick start their careers without the burden of a heavy student debt load.

We can help you get started, just like we have done for over 500,000 Canadian families

Let a CST Sales Representative walk you through the ins and outs of CST RESPs. Helping families save for higher education is at the heart of what we do. We make education savings easy to understand while delivering low risk, hassle-free RESP solutions. Speak with a CST Sales Rep today!