When deciding on your child’s future post-secondary education and how to pay for it, having all the facts is key to your peace of mind.  That is why CST Consultants is making sure that families get the information they need quickly and easily. This page was created to help answer some of the questions you may have about CST RESPs.

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. An RESP is a way to proactively save money towards a child’s education so that when they’re ready to study, 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: Who can open a CST RESP for a child?

A: Anyone can open an RESP, not only the child’s parents, but grandparents, aunts and uncles, even a friend of the family.

Q: What is the minimum amount that I need to open a CST RESP?

A: One of the key advantages of a Group Savings Plan 2001 RESP from CST is the low contribution level.  You are required to invest the minimum contribution that is the greater of $9.50 per month or 1/10th of a unit.  The minimum initial contribution for enrolling in a Family Savings Plan or Individual Savings Plan 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: Does my RESP require a lot of time to manage?

A: Not at all! You start a plan and CST will do the rest. CST manages your funds for you and sends you an annual statement of your plan. We also eliminate the hassle of having to make manual monthly payments by arranging automatic contributions from your bank account.

Q: How is the money invested?

A: CST’s investment methodology is aligned with their corporate vision of helping parents save for their children’s post-secondary education through long-term investments. This disciplined savings approach balances the need for income with principal protection.

Your RESP principal (contributions net of sales charges and fees) and grants are invested in secure fixed-income government and financial institution bonds. The principal will be returned to you at maturity.

The income your principal earns can be invested in the fixed income classes above and a mix of Canadian equities, U.S. Exchange-Traded Funds (ETFs), and investment-grade corporate bonds to make sure your investment earns competitive returns over the life of the plan.

The Plans are managed in accordance with the investment restrictions set out by the Canadian Securities Administrators and the undertaking to securities regulators modifying these restrictions.

Q: What happens if my child does not pursue post-secondary education?

A: If your child decides higher education is not for them, CST provides you the option to move your principal and income in Group Savings Plan 2001 to the Individual or Family Savings Plan up until the end of the calendar year in which your child turns 20 years of age. From there, you may have several possible options open to you.

  • Transfer the plan to another eligible beneficiary
  • If the plan has been open for more than 10 years and your child is over the age of 21, you may transfer up to $50,000 of income to your RRSP or spousal RRSP tax-free, or up to $200,000 to your child’s RDSP provided you have sufficient contribution room. Government grants will need to be returned to the government.
  • Withdraw the income and pay tax on it at your marginal tax rate, plus an additional tax of 20%.   

Q: What if my child wants to pursue an education outside of Canada?

A: You can use a CST RESP almost anywhere – in Canada and around the world – starting from the first year of your child’s study. If your child is studying outside of Canada, any full-time university program of three weeks or more is eligible; any other post-secondary program abroad must be 13 weeks or more to be eligible.

Q: How do I get started?

A:  You can start by doing your research. You can also speak to one of CST Consultants Sales Representatives who can help you get started. When speaking to any Sales Representative, asking the right questions will lead you to the right answers. Be sure to ask about:

  • Commissions and trailing commissions
  • Management Expense Ratios (MERs) or Management Fees
  • Transfer fees
  • Administration Fees and Sales Charges
  • And why CST could be right for you!

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).