RESP Account

With the increasing cost associated with college or university, parents are looking for smart ways to save for their children's post secondary education. An RBC Direct Investing Registered Education Savings Plan (RESP), combined with the Canada Education Savings Grant (CESG), can help make a difference for your child's future.

Grants and Incentives

The Canada Education Savings Grant

Every Canadian child registered as an RESP beneficiary is entitled to receive an extra 20% through the Canada Education Savings Grant. For the first $2,500 you contribute each year to an RESP, the federal government will match 20% of your contribution for that child - up to $500 per year. Over the life of an RESP, the child named as beneficiary could receive up to $7,200 from the grant. Add to that the growth you can achieve on the additional funds and the grant can make a substantial difference to the end result.

Quebec Education Savings Incentive

The Quebec Education Savings Incentive (QESI) is a refundable tax credit that encourages Quebec families to start saving for the education of their children and grandchildren. RBC Direct Investing will automatically apply for and directly deposit the basic tax incentive for all eligible Registered Education Savings Plans (RESP) held with RBC Direct Investing. The incentive is equal to 10% of the amount contributed into the qualifying RESP each year, to a maximum of $250.00 per year.

Make your contribution by December 31 and be eligible for the Canada Education Savings Grant⁺ or the Quebec Education Savings Incentive⁺.

What is an RESP and how does it work?

An RESP is a tax-sheltered savings plan, approved by the Federal Government, that allows you to contribute up to a maximum of $50,000 per beneficiary.

Contributions can be made over a 31 year period from the date you open the RESP, and the plan can remain open for a maximum of 35 years.

The contributions you make to an RESP are not tax-deductible, but tax on the income earned on investments within the Plan is deferred until the intended beneficiary withdraws the funds. If the plan earnings are withdrawn to cover qualifying post secondary education expenses they are taxed to the beneficiary not to the subscriber. In many cases, the beneficiary will be in a lower tax bracket at the time withdrawals are made.

Funds from the RESP can be used towards study in a qualifying program at a recognized post-secondary educational institution, as long as the beneficiary is a full-time student.

An RESP Family Plan gives you even more flexibility.

An RESP Family Plan allows you to name more than one beneficiary, add a beneficiary or change the named beneficiary at any time under the same Plan. This is applicable if the beneficiary is related to you, the contributor, by blood or adoption, giving you the flexibility to share the assets you've accumulated in the Plan between several beneficiaries, according to their needs.

If a beneficiary does not pursue a post-secondary education, the funds in the RESP can be easily transferred to those who do, without incurring a penalty.

Details about RBC Direct Investing RESP Accounts

An RBC Direct Investing RESP can hold a wide range of RESP-eligible investments, including GICs, treasury bills, money market instruments, bonds, stocks and over 2,500 mutual funds.

There is no fee if you maintain a balance of $25,000 or more in your RESP. Balances of less than $25,000 are subject to a low annual administration fee.

It is quick and easy to make cash or RESP-eligible security contributions to your RBC Direct Investing RESP from your RBC Direct Investing Investment account.

RBC Financial Rewards®

With your eligible RBC Royal Bank® credit card you can earn RBC Rewards® points on purchases made. In turn, you can redeem your points for RBC Financial Rewards vouchers that you can use to make a contribution into your RBC Direct Investing RESP, just like cash.

Open an account

Make the right move and start enjoying the speed, security and reliability of RBC Direct Investing.

⁺ Currently, the CESG and QESI are the only grants that clients can benefit from with an RBC Direct Investing RESP. If you have any questions about grant eligibility, please contact us at 1 800-769-2560.