What are the different types of Registered Education Savings Plans (RESPs)?

There are various RESP vehicles presently available to assist you in saving for your child's future post-secondary education. Generally speaking they are divided into two: Self-Directed RESPs and Pooled RESPs.

Self-Directed RESPs are offered through financial institutions with the subscriber directing the investments. The choice of the RESP investment vehicle is dependent on the subscriber's own investment strategies and these types of plans typically require investment knowledge and experience to perform well. The contributions into Self-Directed RESPs are not necessarily guaranteed; risk to the subscriber's principal would be in correlation to the volatility of the investment vehicle chosen.

Pooled RESPs, like the one Heritage Education Funds distributes, combines the contributions of all subscribers and professional managers direct the investments. Contributions and interest earned are generally invested in safe and secure, government and fixed-income investments.

Regardless of the savings vehicle chosen, it is imperative that the plan be registered as a RESP to benefit from the Canada Education Savings Grant.