Best RESP Providers In Canada

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Ready to start saving for your children’s post-secondary education? This post covers some of the best RESP providers in Canada.

Saving for your young ones’ education is one of the best ways of protecting your family and securing their future.

The RESP is a smart tool for savvy parents that allows them to invest and grow their investments tax-free.

In this post, we’ll cover some of the best RESP providers in Canada and how to get started with investing in your RESP.

What is an RESP?

Registered Education Savings Plan (RESP) is a government of Canada program that was set up to encourage savings for post-secondary education or training programs.

All contributions to the plan will grow and compound on a tax-free basis. That is, the returns earned on the investment will not be taxed as long as they remain in the account.

As an added incentive, the government will match your contributions to your RESP account through a number of grants.

RESP subscribers have the option of opening an individual plan for each child or a family plan for all their kids that are related by blood or adoption.

There are also group or scholarship plans that pool the funds of many beneficiaries together into one plan.

A list of the best RESP providers in Canada

RESP Contribution Limit

The contribution limit of RESPs works differently from that of the other popular registered accounts like TFSA and RRSP.

With an RESP, there is a lifetime contribution limit of $50,000 for each beneficiary. There are no lifetime limits for the other registered plans at the moment.

Also, RESPs have no annual contribution limits. That means it is up to the RESP subscriber (parents/guardians) to decide if they want to contribute the entire $50,000 in a single year or spread it across several years to take advantage of the savings incentives.

Learn more: RESP Contribution Limit

RESP Savings Incentives

One of the biggest benefits of saving for your kids’ education using an RESP is the government grants you receive for your contributions.

There are 3 Government of Canada grants and 2 provincial grants.

  1. Basic Canada Education Savings Grant (Basic CESG): 20% match on the first $2,500 contribution per year. This grant is not income-tested so it is available to every RESP beneficiary irrespective of the parent’s income up to the year they turn 17.
  2. Additional CESG: provides an extra 10% or 20% on the first $500 depending on income
  3. Canada Learning Bond (CLB): another income-tested education savings incentive. Eligible beneficiaries get $500 in the first year and $100 in each subsequent year they remain eligible up to a lifetime limit of $2,000.
  4. British Columbia Training and Education Savings Grant (BTCESG): One time payment of $1,200 for BC residents.
  5. Saskatchewan Advantage Grant for Education Savings (SAGES): 10% grant on contributions made for Saskatchewan residents up to an annual limit of $250. The program was temporarily suspended in 2019.

The lifetime limit for CESG, both basic and additional, is $7,200.

You should know that some RESP providers will not offer all the government grants above. Most of them offer the federal government grants, but you should check with them if you live in a province with a 2 provincial incentives.

There’s a handy list of RESP providers in Canada showing the Government of Canada grants and Provincial education savings incentives they offer.

Related Post: Canada Learning Bond (CLB) Guide

choosing the best RESP provider in Canada

Types of RESP Plans

In general, there are 3 types of RESP plans. The one you choose will determine the best RESP plan provider for your needs.

The three RESP plans are:

Individual RESP Plans

These are the simplest and one of the most common RESP plans. Each plan has a single beneficiary and they are ideal for parents that want to keep things separate for their kids.

Any of the RESP plan providers covered below provides individual plans and you can open one with your bank too.

Family RESP Plans

With Family RESP plans, the RESP has more than one beneficiary. However, all the beneficiaries must be related by blood.

Also, you’ll need to decide the allocation of funds whenever you contribute to the account or set up the percentage that goes to each child with your RESP plan provider.

Group RESP Plans

Also called scholarship plans, these RESP plans pool together the contribution of several children from different families into a single fund that is managed by the scholarship plan proider.

They are very inflexible with contributions, withdrawals and generally difficult to understand. In general, they’re also more expensive, with higher management fees.

There are several horror stories out there when it comes to these types of plans and you should do your due diligence before signing up to any group RESP plan.

Irrespective of the RESP plan you decide to go with, they’ll all let you set some money aside for your kids’ college cost.

But choose wisely to avoid loosing some of your hard-earned money to huge fees.

Choosing The Best RESP Provider

When it comes to picking an RESP provider, Canadians have several options to pick from. The link above has over 82 providers for example.

So which one is right for you? What are the things to look out for?

In choosing the best RESP provider for you, here are some factors to consider:

  • The types of plan provided
  • Account opening and Transaction Fees: Are there fees to set up an RESP plan? What of the on-going transaction fees and charges?
  • Investment options: How will your contributions be invested and in what assets?
  • The Government grants offered: Does the RESP provider offer all the grants you qualify for?
  • Managed or self-directed account: Do you want the RESP promoter to handle all the investment decisions or you prefer to be in charge yourself?

It is important to think about all of these before you finally decide on the best RESP provider for your needs. You’ll be contributing and investing for many years to come, so make some effort and try your best to get things right.

Tip: Avoid group or scholarship plans. They are inflexible, generally more expensive and the contracts are difficult to terminate without losing a bunch of money.

If you want to an easy way to get started with RESP without the high fees, then checking the providers below is a good starting point.

Best RESP Providers in Canada

So which is the best RESP provider in Canada?

We’ve shortlisted the top 4 based on their features, convenience, and fees. So the best RESP plan providers in Canada are:

  • Questrade RESP
  • Wealthsimple RESP
  • Justwealth RESP
  • CI Direct Investing RESP

We’ll cover the 4 RESP providers’ offerings in details below:

1. Questrade RESP

Questrade is Canada’s largest independent online brokerage. In addition, it has a robo-advisor offering called Questwealth Portfolios.

It is the only one on this list that has both a managed and self-directed RESP offering. That is, you can either choose to let Questrade handle all the investing decisions for an industry-low fee or direct the portfolio yourself.

Managed RESP – Questwealth Portfolio

Questwealth Portfolios have the lowest management fees among the robo-advisors. It starts at 0.25% and drops to 0.20% for deposits above $100,000.

But the underlying ETFs the portfolios hold have their own separate fees – about 0.11% for Questwealth Balanced portfolio. Even after adding the fees for these ETFs, you are still looking at a lower cost than the management fees at other robo-advisors.

Self-directed RESP

Investors can buy ETFs for free but there’s a fee to sell them or trade stocks. The brokerage cost is 1cent per share, minimum of $4.95 and a cap of $9.95. This is also one of the lowest fees in the industry.

Canadians can now trade stocks commission free on Wealthsimple Trade, but RESPs are not supported for now so it’s not an option.

If you’re willing to spend a few minutes every month or each time you need to invest, you can set up a low-cost RESP portfolio with “all-in-one” ETFs at Questrade.

Your only investment costs will be the MER of the ETF you invest in – about 0.20% for ishares asset allocation ETFs for example. Read this post on how to start investing with one-ticket ETFs.

Use the Questrade offer code in the link below to get a $50 trade rebate or $10,000 managed free for the first year.

NOTE: One other perk of opening an account with Questrade is that you get to enjoy the Passiv Elite Member subscription for free – a $99/year value. Passiv is portfolio management on autopilot. It makes it easy to “build your own personalized index, invest and rebalance with the click of a button, and seamlessly manage multiple accounts”. You can say good-bye to those spreadsheet!

Related Post: Questrade RESP Review

2. WealthSimple RESP

WealthSimple is Canada’s largest robo-advisor with several products across the different registered accounts.

There are no minimum investment amounts with Wealthsimple so you can start saving and investing with little amount.

The management fees also start at 0.50% for deposits up to $100,000 but drops to 0.40% above that. In addition, the underlying ETFs add another 0.20% as MER for a total of 0.60% to 0.70%

Wealthsimple is a great option for people that value simplicity and a great user experience.

Check this post for a detailed Wealthsimple RESP Review.

3. Justwealth RESP

Justwealth’s Education Target Date Portfolios sets it apart from other RESP offerings by robo-advisors. Target date funds are an innovative investment product that are designed to align a portfolio’s risk with when the investor will need the funds.

In plain English…

The portfolio will start out with an higher risk (more allocation to equities), but the fund will gradually shift towards less risky investments as it gets closer to when the funds will be needed (maturity date) – that is, your child’s enrolment date.

In other words, Justwealth RESP portfolios have a time horizon of about 18 years.

Unlike Questrade, there are no minimum account sizes. The annual management fee starts at 0.50% of the value of your assets:

  • $500,000 and below – 0.50%
  • Above $500,000 – 0.40%

But there’s a minimum fee of $2.50 per month on RESPs or $4.99 for other accounts. There’s an extra 0.20% MER on the ETFs Justwealth invests in for a total cost of about 0.70%

Other features of Justwealth RESP are:

  • Access to a personal portfolio manager
  • No transaction fees
  • A huge selection of ETF portfolios

If you want an RESP portfolio that will be hands-off and automatically adapt its holdings as your child gets older, then Justwealth is a good fit.

Learn more:

4. CI Direct Investing (formerly Wealthbar)

The robo-advisor has 2 sets of portfolio: low-cost ETF portfolios and private investment portfolios that invests in real estate, mortgages, options and other alternative assets that are usually accessible to only high net worth investors.

CI Direct Investing RESP fees are:

  • First $150,000: 0.60%
  • Next $350,000: 0.40%
  • Above $500,000: 0.35%

The MER of the ETF portfolios are between 0.17% and 0.19%, while the Private Investment portfolios range between 0.85% to 1.55%.

Like Questrade, you also need a minimum of $1,000 to start investing in RESP.

You get the following when you setup an RESP account at CI Direct:

  • Your own dedicated financial advisor and financial planning
  • Access to a diversified portfolio
  • No trading fees
  • Transfer fee rebate of up to $150 when you move an account with a balance of $25,000 and above from other financial institutions.

Learn more: CI Direct Investing Review

Best Self-Directed RESP in Canada

Questrade Self-directed RESP is the best self-directed RESP in Canada. It provides a low-cost way of building an RESP portfolio without the high fees.

You can easily setup an RESP for your kids and make regular contributions to it. And to keep things simple, you can buy asset allocation ETFs like VGRO or VEQT that’ll automatically rebalance their holdings for FREE.

With self-directed RESPs, you’re in full control of the account – how much you contribute, when you do and what to invest in.

They are not as hands-off as robo-advisor RESP accounts, but they can keep your costs lower.

Besides, you won’t have to spend more than a few minutes each time you need to trade if you go with asset allocation ETFs.

Check this Questrade RESP Review to learn more about its offering and get $50 bonus when you sign up plus up to $250 in other bonuses.


Opening an RESP Account

If you’re ready to open an account with one of the Best RESP providers in Canada, here’s how to go about it.

The requirements for opening an RESP account for your kids may vary depending on the financial institution you choose.

But at the minimum, you’ll need to provide the Social Insurance Number (SIN) for yourself and your kid(s), along with a birth certificate.

With the robo-advisors, you will be able to complete most of the forms and documents online and sign using electronic signatures.

In fact, the process can be completed entirely online at Wealthsimple.

If you get stuck anytime during the process, you can always reach out to the RESP provider for clarifications.

RESP Withdrawal Rules

You can withdraw from your RESP account tax-free to fund your child(ren) post-secondary education. 

This could be from the mixture of your contributions, government grants, and earnings from your RESP investment.

However, the following Educational Assistance Payments (EAP) conditions apply to withdrawing the government grants and earnings on investment:

  • $5,000 withdrawal limit for full-time post-secondary students.
  • $2,500 withdrawal limit for part-time post-secondary students.
  • Filing of T4A slip by an eligible child for declaring EAP as income.

That said, the withdrawal limit for full-time and part-time post-secondary students applies only for their initial 13 weeks in school. After that, there are no withdrawal restrictions.

As mentioned previously, RESP withdrawal rules may vary by provider. So it’s essential to know your provider’s terms before signing.

How to Make an RESP Withdrawal

Again, the RESP withdrawal process varies by provider. Your provider may require you to apply in person or online with supporting documents.

Regardless of your provider’s withdrawal process, only withdrawals of your original RESP contribution is tax-free. 

Taxes may apply on withdrawing the accumulated interest on your investments and government grants.

How is your RESP calculated?

Your RESP value is made up of your total contributions, all the government grants received and any accumulated gains or loss on your investments.

Here’s an illustration:

Supposed you contributed $2,500 annually to your RESP for 5 years, you will have:

  • Total RESP Contributions: $12,500
  • Total Government Grant*: $2,500
  • Returns on Investment: $5,000

For the government grant, let’s assume you only qualify for the CESG 20% match and none of the other federal or provincial RESP grants like CLB, BTCESG and additional CESG.

Overall, you will have a total of $20,000 in your child’s RESP portfolio after the 5 years.

The best part is, irrespective of the returns on your investment, you get a 20% return on your RESP contributions. 

Even with the lifetime CESG limit of $7,200, the grant is a good return for doing nothing more than contributing towards your child’s education. 

Advantages of RESPs

The following are the major advantages of opening an RESP account. 

Government Grants

The Government matches your RESP contributions up to $2,500 per year by a minimum of 20% through the Canada Education Savings Grant (CESG). This means enjoying up to $500 government grants annually. 

Low to medium income families get an additional 10% – 20% match on the first $500 RESP contribution each year.

And if you missed RESP contributions in a year, you can catch up with the CESG in the next year. So potentially, you can get up to $1,000 in free CESG money in a year.

Also, you could get up to a lifetime limit of $2,000 per child through the Canada Learning Bond (CLB) depending on your family income and number of children. 

Tax Sheltered Investment

RESP is a registered account like RRSP, TFSA, RRIF and so on. So your contributions and earnings on RESP remain tax-free until withdrawal. 

However, you’re only taxed on the interest/returns of your contributions and any government grants received. Your initial RESP contributions can be withdrawn tax-free.

But with careful planning of the timing of the withdrawals, you get to pay very low to zero taxes on the funds. 

This is because the withdrawn amounts are taxed in the hands of your kids. And given that they’ll still be in school and not working, they will be in a lower tax bracket and pay almost no tax. 

All-Round Flexibility

RESPs are flexible accounts that can be invested in different securities, ranging from ETFs, stocks, mutual funds, bonds, GICs etc. 

You can invest your RESP with an online brokerage, robo-advisor, traditional bank or credit union in Canada. 

In addition, you can have multiple beneficiaries under your RESP or replace a beneficiary with any eligible child. 

More so, you can withdraw all your RESP contributions or transfer them to an RRSP should your child opt-out of a post-secondary education.

Disadvantages of RESPs

Like other registered accounts, RESPs have a number of disadvantages. They include:

Loss of Government Grant 

All the grants you received under the Canada Education Savings Grant (CESG) and the Canada Learning Bond (CLB) will be clawed back by the government should your child not pursue post-secondary education.

This undermines the essence of opening an RESP in the first place. 

Complex Withdrawal Process  

RESP has a complex withdrawal process that involves documents submission and visiting your RESP plan provider in-person in some instances. 

Also, many RESP providers have their own withdrawal rules and processes that may make it difficult to access funds quickly especially in an emergency.

Over-Contribution Penalty

The government charges 1% per month for contributions more than the $50,000 lifetime limit per child. And there’s no grace amount like the $2,000 excess amount with RRSP.

Depending on how much you overcontribute, the 1% penalty will add up gradually to consume a significant portion of your contribution.

Some FAQs: Best RESP Plan Providers

Which is the best RESP Plan in Canada?

There are several RESP plans in Canada that lets you invest for your children’s post-secondary education in an hands-off manner.

But if you’re looking to open a self-directed RESP, Questrade offers the overall best RESP plan. Its managed account also has the lowest management fees for robo-advisory RESPs.

What is the best investment for RESP?

You’re allowed to hold bonds, GICs, stocks, mutual funds, ETFs and many other eligible investments in an RESP. The best one depends on how far college is for your kids (investment horizon), your risk tolerance and the RESP plan you’re signed up for.

Should I choose a managed or self-directed RESP?

Choose a managed RESP at a robo-advisor if you want to invest in an hands-off manner and not worry about rebalancing, asset allocation and so on.

If you’re comfortable with picking your own investments and can dedicate a few minutes every month to your portfolio management, then a self-directed RESP plan is perfect for you.

Related Post: Building A DIY Model RESP Portfolio Using ETFs

How do I choose an RESP Promoter?

You should choose an RESP Promoter or provider based on your unique needs and situation.

For example, depending on your investment knowledge, you may decide to choose an RESP promoter that lets you invest your own RESP or go with a promoter that offers robo-advisory RESP.

Whichever promoter you choose, make sure you receive and review all the relevant documents. Take note of the fine prints like terms, fees, penalties etc and ask questions if something is unclear.

How much can I contribute to an RESP?

The lifetime contribution limit for RESP is $50,000 per child or beneficiary. It is totally up to you when and how much you want to contribute to the account.

But to maximize the Canada Education Savings Grant (CESG), you’ll want to plan your annual contribution and put in $2,500 per year until you’ve reached the CESG limit of $7,200

Learn more: How Much Should I Put In My RESP Per Month?

Can I invest my own RESP?

You are allowed to open a self-directed RESP account and invest the funds in your RESP yourself. This is a great option for those that are comfortable with placing their own trades and managing their portfolio.

The Questrade self-directed RESP lets you invest your own RESP at a low cost or free if you only invest in ETFs.

Where can I buy an RESP in Canada?

You can buy or invest in an RESP in Canada at any of the traditional banks (like RBC, TD, ScotiaBank etc.), credit unions, online brokerages like Questrade or robo-advisors like Wealthsimple and Justwealth.

Can I transfer RESP to another child?

Absolutely. You can replace a beneficiary with any eligible child or even have multiple beneficiaries under your RESP.

Can I withdraw from RESP for non-educational purposes?

You can use your RESP funds for non-educational expenses. However, withdrawal penalties apply, including tax implications and clawback of government grants.  

How much does Canada give for RESP?

The federal government offers $500 (20% of the first $2,500 contribution) annually up to a lifetime limit of $7,200 under CESG program. You can get an additional lifetime $2,000 under CLB.

Final Thoughts on Best RESP Providers

At the end of the day, the best resp provider for you depends on your personal preference and circumstances.

You’ll still get the same government matching on your contributions and tax-free growth irrespective of the RESP promoter you go with.

And if you change your mind or your situation changes in the future, you can always move your plan in many cases, unless you’re in group plans that are usually not flexible.

So don’t get stuck at the analysis stage. Compare the features of the different RESP accounts and start investing for your kids’ education today.

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Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

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