CST RESP Questions

The Best Future For Your Child: Education Savings Simplified

For parents of small children, it can be hard to imagine their child as a grown-up ready to embark on college or university.  When you take into consideration the amount of money it takes to fund an education, 18 years is not a whole lot of time. The journey to your child’s education is one that can seem overwhelming.  As the cost of tuition continues to increase, it is never too soon to set money aside or begin the planning process.

As the distributor and investment manager of the Canadian Scholarship Trust Plans, CST Consultants Inc. (CST) focuses solely on education savings plans – it’s all we are about, and all that we do. It is through the distribution of RESPs that we strive to enable all Canadian children to have the financial resources to pursue post-secondary education.  As a savings vehicle for post-secondary education, the benefits of an RESP are important to your child’s future education.

There is nothing more important than knowledge and having the facts when deciding on your child’s educational future and how to afford it. We are here to guide you on that journey.  This page is designed to answer some common questions about our RESPs, so that families can make truly informed financial decisions.

If you have additional questions about CST RESPs, feel free to reach out to a CST Sales Representative and they will be more than happy to provide assistance.

Q: What is an RESP?

A: A Registered Education Savings Plan or RESP is a savings vehicle that allows subscribers, such as parents, grandparents, friends and other relatives, to save for a child or other beneficiary’s post-secondary education.

Q: Why open an RESP?

A: An RESP is a way to proactively save money towards your child’s education, so that when they’re ready to begin their post-secondary education, you’ll be ready to help pay for it. RESPs have an additional feature that makes them unique from other registered accounts and investment portfolios in the form of government grants.

Q:  How much will post-secondary education cost?

A: The actual cost that students pay depends on their program of study and which school they attend. On average, tuition for university undergraduate programs for Canadian full-time students was $6,838 in 2018/2019, up 3.3% from the previous academic year. The average cost for graduate programs was $7,086, a 2.4% increase over 2017/2018.

Q: What is the minimum amount I need to open an RESP from CST Consultants?

A: The minimum amount you need to invest in a Group Savings Plan 2001 RESP from CST is the greater of $9.50 per month or one-tenth of a unit. This low contribution level is one of the key advantages of our Group Savings Plan 2001. If you enroll in a Family Savings Plan or Individual Savings Plan, the minimum initial contribution is $150. If your child is receiving the Canada Learning Bond, the minimum initial contribution for the Family Savings Plan and Individual Savings Plan will be waived.

Q: What are the tax advantages of an RESP?

A:  An RESP offers several tax advantages. The investment income earned on your principal (contributions net of sales charges and fees) grows tax-free within the plan.  The contributions you make attract government grants within the plan and the income earned on grants also grows tax-free.  Payments from the plan are taxable in your child’s name, and since they are collecting these payments when they are students and tend to have little or no annual income, little or no tax is payable.

Q: Is it necessary to begin post-secondary education immediately after high school?

A: No. Students have the option to take a year off or switch programs and schools and can still receive payments from their RESP.  Students can receive up to four payments from the CST Group Savings Plan 2001 for a qualified full-time or part-time post-secondary education as long as they finish them by the 36th year of the plan.

Q: What types of post-secondary schools and programs apply?

A:    The government is always evaluating new schools and programs – eligible institutions can range from community colleges and universities to vocational, technical, trade and religious schools.  Canadian programs that are 3 weeks or more are also eligible, in addition to distance learning and correspondence courses.

Q: What kind of customer service can I expect from CST Consultants?

A:     We are committed to fast, reliable and efficient customer service.  You will have access to our customer care department (phone, email and live chat) and a Sales Representative is available to help you.  Information about your account is available online any time on our secure CST Self-Serve Website. We’ll send you a detailed statement of all the activity in your plan once a year.

Q: How can I maximize my child’s RESP?

A:  On birthdays, special milestones or holidays, consider asking family and friends to contribute money to an RESP as a gift. This is a great way to add to your savings and get more out of available government grants. Consider maximizing your child’s RESP by contributing up to the allotted $2,500 per year.  

Q: How will CST Consultants efficiently manage my child’s RESP?

A: This is our area of expertise, so you’ll have access to knowledgeable professionals and reliable savings strategies throughout the lifetime of your investment.  CST portfolio managers help clients save for their children’s post-secondary education through conservative, long-term investments. Our disciplined savings approach balances the need for income with principal protection and safety from excess market volatility.  Your RESP principal and grants are invested in stable and secure fixed-income government and financial institution bonds. The principal will be returned to you at maturity.

Q: Can an RESP be used for living expenses during post-secondary education?

A: Yes. RESP money can be used for much more than tuition, books, and residence. Money can be used to purchase a meal plan or to pay for transportation to the school. Even costs like athletic or student activity fees would qualify.

Canadian Scholarship Trust Plan is only sold by Prospectus. Investors should read the Prospectus before making an investment decision because it includes important detailed information. You can get copies of the Prospectus from www.cst.org or by calling 1.877.333.RESP(7377).