Individual RESP vs. Family RESP:
Which is for you?

mother sits with daughters on campusStarting a Registered Education Savings Plan (RESP) for a child is always a good idea, regardless of the type of plan you choose. You’re providing them with an extra boost in achieving success later on down the road, but what does that plan look like? Well, there are two types you can choose from!

Both have similar features like the same lifetime contribution limit of $50,000 per beneficiary, eligibility requirements for government funding and the ability to hold as many RESPs as you’d like. However, there are some key differences to keep in mind when choosing the best plan for you. They include:

Individual

  • Only one beneficiary can be named to the plan, but you don’t need to be related.
  • The beneficiary can be named to the RESP at any age.
  • Contributions can be made to the plan for a maximum of 31 years, regardless of the beneficiary’s age. So, if you open an RESP for your 5-year-old niece, you can make contributions to the plan until she turns 36 if you so choose.

Family

  • Add as many beneficiaries to the plan as you’d like, however, you must be related to all the beneficiaries.
  • Beneficiaries must be under 21 years of age when they’re named to the plan and be siblings to the other beneficiaries. However, when transferring funds from one beneficiary to another, the beneficiary can be over the age of 21.
  • Make contributions until the beneficiary turns 31 or 31 years after the plan was entered into, whichever comes first.
  • If one child decides not to attend post-secondary school, the funds are transferrable to other beneficiaries in the plan. This gives you the flexibility to spread the contributions unequally among the beneficiaries.

So which plan is right for you?

Either type of RESP is a fantastic option given today’s rising costs of post-secondary education. Your decision on which to choose may depend on your relationship to the beneficiary and your personal preferences, since both types are eligible to receive government funding such as Canada Education Savings Grant (CESG), Canada Learning Bond and provincial education savings incentives.

Parents looking to start saving for their children’s education may find the family RESP more convenient, simply by having all accounts in one place. There’s also the added flexibility of sharing the contributions if one child decides not to attend post-secondary.

Parents looking to start saving for their children’s education may find the family RESP more convenient, simply by having all accounts in one place. There’s also the added flexibility of sharing the contributions if one child decides not to attend post-secondary.

RESP CalculatorSee how quickly your child’s educational savings can grow with our calculator.

I'm ready to start an RESPHaving trouble deciding? Contact Affinity Wealth Management at 1.866.272.2521 and learn more about which plan might be best for you! You can also open an RESP online through our partners, Qtrade Direct Investing or VirtualWealth.