Why save with an RESP?

Understanding the facts

Get the facts on the growing importance of higher learning, the rising costs of post-secondary education and how having an RESP can help manage these costs. The more you know, the better your decisions will be.

Fact: Post-secondary education is critical to success.

Numbers don’t lie. More than ever, the job market requires the advanced degrees and specialized skills that come from higher learning. At the same time, the cost of education is dramatically on the rise.

  • The tuition fees for undergraduate programs for the 2020/2021 academic year have increased by 1.7 per cent to an average of $6,580 across Canada.1
  • According to Statistics Canada, the average university graduate finishes school with $26,000 in student debt.2

FACT: It could cost $153,000 to send your child to university by 2039.

Education Expense

This illustration shows that to send your child to university by the year 2039, you’ll need about $71,000 for tuition, which does not include room and board (away) for a 4-year university program.

Fact: Saving early is in your best interest.

The earlier you start saving for your child’s education, the more your savings can benefit from the power of compounding. See the difference just five years makes in this illustration. These projections are based on a contribution amount of $210 per month starting over different time periods. You can see how income grows over time on your contributions and on the government grants. If your family expenses are currently too high to put aside $210, the good news is that you can open a CST RESP for less than $10.00 a month4 to start growing your money tax free. 

CST™ Advantage Plan Saving Early

  • Principal6

  • Income, Group Plan Benefits + Sales Charge Refund9

  • Canada Education Savings Grant(CESG)7

  • CESG Investment Income8

Fact: You can avoid the burden of debt.

Like with any major purchase or expenditure, post-secondary education can be financed through saving or borrowing. With the cost of education rising every year, young parents often find themselves wondering which direction they should go in – saving or borrowing? With a few simple projections the ideal choice becomes very clear. Borrowing doesn’t just cost more in the long run, it also puts the burden of debt on your child. This illustration shows you how a contribution of just $210 a month for 17 years can result in considerable savings that reduce the need for a student loan.

CST™ Advantage Plan compared to student loan program5

  • CST™ Advantage Plan Total Value6,7,8,9

  • Student Loan

  • Loan Interest

Fact: You can access $7,200 or more in government grants for your child’s RESP.

You can enhance your disciplined education savings strategy with the benefit of government grants. The sooner you start a Registered Education Savings Plan (RESP) for your child, the sooner you will be rewarded by the Canadian government for planning and thinking ahead.

Canada Education Savings Grant (CESG)* Everyone is eligible for the basic CESG which matches 20% of the first $2,500 you contribute to your child’s RESP each year up to a lifetime maximum of $7,200.
Additional CESG (ACESG)* If your family has an annual income below $98,040 your child may be entitled to an additional grant on the first $500 you contribute to his/her RESP each year. This additional 10% or 20% grant is referred to as the ACESG.
Canada Learning Bond (CLB)*

Families with lower income can receive $500 in the first year and an additional $100 per year for each year they qualify until their child turns 15 - this could add up to an additional $2,000 in grants towards their child’s RESP.

* Subject to government guidelines.