The institution that sets up a RESP is called a provider, and many financial organizations can provide the plans which differ accordingly. The decision you make can significantly alter the amount your RESP plan will generate over its lifetime. With the large number of providers to choose from, it is imperative to take time to select a RESP that meets all your needs carefully.
What to Consider in Choosing a RESP Provider
RESP providers are set up differently and are governed by and with different rules. Thus, before you decide, it is essential to consider various aspects. For example, some of them may require a service fee or regulate how often you make your contributions. Other considerations that you must understand, include any penalties, payment options, and limits, including hidden requirements.
Questions to Ask a RESP Provider
- What are the requirements to open a RESP; any fees? When should the fees be paid?
- Is there a minimum contribution to a RESP? Can it be changed?
- Does one have to make regular contributions? What if they are unable?
- What investment choices are available? Any associated risks?
- Is one able to withdraw money in case of an emergency? Are there any charges associated with it, such as penalties for cancellation and early withdrawals?
- Is the RESP transferable to another person or another provider?
- Is there a limit on the educational programs the RESP can be used for?
- What happens to the RESP if a child is unable to continue with education after secondary?
- Will the RESP apply to part-time programs?
- Do you provide regular updates on the status of the RESP and investments?
- Does the RESP offer all other education savings incentives provided by the government?
It is crucial to have a clear understanding of all conditions around a RESP offer. The questions will offer guidance to ensure all the information is acquired before deciding on the provider.