Registered Education Savings Plan Canada’s Answer To Funding Student’s Education

In our technology-driven world, continued education after secondary school is important. Going on to college or at least into an apprentice position is the best way to secure an education that will ensure you a job that will support you and your family. However, the cost of continued education is often the first reason a student gives when asked why they have chosen not to pursue a quality education. Canada has put many plans and options into place to remove the financial obstacles that students are facing. In this article, we will address one such plan.


RESP is short for “Registered Education Savings Plan”.  For 60-years CST Spark has been helping Canadians save and plan for their child’s education after their high-school years. To be clear, there are other programs. However, CST Spark believes people should have a choice. They should be able to work with their saving program and live comfortably. They should receive excellent family support and service. These core values are the foundation that CST Spark is built upon.


In 1969 CST proposes RESP to the government as well as a law that for a person who is involved in a RESP, there are no federal taxes due. Due to the low income that most students earn while they are in school, they rarely pay taxes when they make a withdrawal during their college years. This is why we say RESP funds are virtually tax-free. In 1972 the government introduces RESP and implements the tax changes.

How Does RESP Work?

Your CST Spark plan is based on the age of the child or children at the time you begin. You can begin the process by filling out the online application. How much you want to pay and when you want to pay is u to you. Make your initial payment and CST will take it from there. There is online help, or you can contact them through the contact information on the site. You will notice immediately; they are there to help you. If you have a problem or a question, do not hesitate to reach out to them.


RESP Withdrawal

  • This RESP amount can be withdrawn by the subscriber at the time of the student’s post-secondary education.
  • Only the person who opened the RESP account can withdraw it.
  • The subscriber will need documentation (a letter of joining) to submit to the bank that has all of your information listed as well as the schedule of the student. It is important to state if the student will be attending full-time or part-time classes.
  • You can only withdraw $5000 during the first 15 days of your joining in the government-approved financial institute
  • Once 15 days are over you can withdraw any amount of your choice.

RESP Rules

  • You cannot withdraw the funds early or else you may subject to paying fines.
  • RESP plans are for residents of Canada only
  • Only the subscriber who opened the account can claim the payment.
  • RESP was open for at least 10 years before a withdrawal is requested.

What if you don’t use your RESP?

If the student you were saving for is not interested in advanced education, you can transfer the funds to another family member as long as the deposit does not put them over the maximum amount allowed. If that is not an option, you can withdraw the money. However, you will be charged a 20% penalty and will be responsible for the taxes on the money.

Can we use RESP for other expenses?

Yes, you can use the amount withdrawn from the RESP for other expenses as long as they are connected with your education. This could be expenses like your hostel fee, travel expenses as well as food expenses and uniform. But you cannot use the money for non-educational items.

You can use the money as long as you don’t spend the money on non-education related things like your personal uses or so.

Final Words

The RESP plan has proven itself over the years. This plan has allowed people who are low income or middle income to send their children to some of the best colleges in the nation. It has taught the youth of our nation that working and saving toward a common goal is a worthy plan of action. Canada has invested heavily in our people and it is our people who have taken us to new heights. We will continue to rank in top levels of education studies around the world and we will continue to make new paths for our students to grow and learn.

David Jackson

David is a personal finance expert, a professional male model, and an entertainment writer.