RESP Rules And Strategies For 2014

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Here is a list of the best RESP articles on this site.  You can find out all the information you need about RESP accounts, contributions, and withdrawals.

General RESP rules – One page summary of RESP accounts and their rules.

RESP Withdrawal Kindle eBook

RESP Withdrawals

Questrade Democratic Pricing - 1 cent per share, $4.95 min / $9.95 max

RESP Accounts

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Want to learn more about RESPs? Buy The Book:

Resp-Book

The RESP Book: The Simple Guide to Registered Education Savings Plans

Everything you need to know about RESPs.

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{ 53 comments… read them below or add one }

51 Mike Holman

Email from Bob:

My son is in his fourth year of University and recently received his student loan statement for the coming year. Since our family income is slightly above the level that the federal government considers middle income (to qualify for federal education grants) we were surprised when we figured out that our son would be graduating with less debt if he hadn’t received EAPS from an RESP.*

I’ve read on your blog that an Ontarian student can possible withdraw their CESG in one year and still receive Ontario Student Opportunity Grants in other years but that isn’t the way it works in NS. Here when a student completes a four year degree their student loan is capped at $28560, which happens to equal four times the maximum annual federal student loan amount ($7140). Therefore as long as there is the maximum federal loan every year, at graduation all provincial loan and grants becomes a forgivable grant.*

As our son cannot live at home (we live beyond commuting distance) he would have qualified every year for the maximum federal loan. If our son had not had an RESP his forgivable provincial loans and grants would have totalled approx. $13000. However, because of his EAPs, his provincial grants only totals $1394. Therefore his government grants (CESG + provincial grants) was $5100 + $1394 = $6494. So if he hadn’t had the RESP EAPs he would have approximately $6500 less student loan to repay after graduation.*

The NS loan cap was announced after we finished contributing to his RESP so we don’t fault ourselves for making that decision but now I would be very hesitant to recommend RESPs to any NS family unless they qualified for the Canada Learning Bond. Families whose income is too high to qualify for the maximum federal student loan should also consider contributing to an RESP to gain the CESG. (My very back of the envelop calculations plus the CanLean parental contribution calculator predicts that could happen after the parental income exceeds $126,000.). I don’t have a crystal ball to predict how long the NS student loan cap will exist in its current form but for now other NS families, whose students won’t be living at home, might be better advised to save money outside of an RESP and then gift it to their student when they are ready to pay off that $28560 loan.

52 Biren

Hi Mike,

I have been contributing to Group RESP Plan for my son for last 11 years. In near future we are going to be non resident of Canada. I know that if my son becomes non resident then I can’t contribute. I would like to stay in the plan.
Is it possible that stay in the plan by converting it into paid in full status? Is this status can be achieved by reducing number of units and not contributing any further? Please advice.

53 bob shaw

I have been with a group resp provider for 9 years. From the beginning they were anything but forthcoming in their disclosure of fees and penalties regarding their product. They charged a 3500 fee to be paid in the first 2 years which at the time I was led to believe it would be prorated over the duration of the saving plan. I was not made aware of this until over a year later when I received my first statement. After much handwringing and contacting my provincial ombudsman did I reluctantly proceed with this product. Not wanting to lose my investment and having the ombudsman state that these were indeed legitimate government regulated products I am still a client with this company. Skimming over a whole of punitive issues that don’t arise with the regular banking system I would like to fast forward to the present. It is now 2014 and I received a pamphlet in the mail outlining proposed changes to their qualifying programs. These changes needed customer voting in order to proceed. Their glossy brochure outlined all their fabulous new features designed to entice new customers but amidst this brochure was hidden a brief one line statement stating that they could now invest all or part of our money to gamble in the stock market. Prior to this the money was guaranteed to be placed in T-bills and government bonds. Hiding in the middle of paragraph well after their highlighted features most people who could be bothered to vote probably didn’t even see or recognize the incredible volatility this could cause. I would like to move my money immediately from this high risk plan but their penalties are severe. In addition to losing the 3500 they take right off the to, they also take all the income earned since inception. They also return all government grants and income from those as well. This is leaving me extremely uncomfortable. One of the changes they are making is when missing contribution payments instead of having to make up all missed contributions before receiving payments from the plan, they are now willing to commute the plan to reflect payments made. If this is so can I open a second resp with a different institution(bank) not group resp. This would effectively split my resp in half and at least mitigate the potential damage done by this ill guided and certainly not wanted change in direction half way through this process

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