The Family Group plan is an RESP designed for families who value a disciplined approach to their education savings. It can be a good choice for you if you are fairly certain that:
- You will be able to make all your contributions according to your contribution schedule;
- You will stay in the plan until it matures; and
- Your student will attend four years of post-secondary education.
With the Family Group Plan, the income earned on your contributions is pooled with the income from other families with the same year of eligibility. When your plan matures, your share of those earnings plus your government grants are paid to your student as education assistance payments (EAPs). You also have the option of transferring to a Family Single Student plan should you change your mind about pooling your earnings at maturity.
If you leave the plan early, however, or your child doesn’t qualify for education assistance payments, you could lose your earnings to the group pool. That’s the downside. The upside is that by staying in the plan, you might share in the earnings of those who do leave early.
How to Contribute
You make contributions to your plan based on a contribution schedule. You can contribute monthly, annually or make a one-time lump-sum contribution.
Your contributions are converted into one or more ‘units’, depending on how much you contribute, how often and the number of years until your child starts post-secondary studies. These units represent your share of the group plan. The more units you have, the higher your child’s payments from the plan will be.
You can change the amount or frequency of your contribution as long as you make the minimum contributions of:
- $9.72 per month,
- $108.12 per year or
- A lump-sum contribution of $449.
If you miss any scheduled contributions, you will need to make them up, along with the income they would have earned, in order to maintain the same number of units in the plan. Alternatively, you can choose to reduce the number of units in your plan or transfer to an individual Family Single Student plan.
How Your Money Is Invested
With a Family Group RESP, you don’t have to worry about making investment decisions or managing a portfolio. We take care of that for you with a strategy focused on providing steady growth in your investments over the long term.
Your contributions, along with government grants and the income earned on both, are invested mainly in Canadian fixed-income securities such as federal, provincial and municipal bonds, mortgage-backed securities, treasury bills and investment-grade corporate bonds. A portion may also be invested in Canadian and U.S. equities or exchange-traded funds (ETFs), which have the potential to generate dividend income and capital gains.
For full details on the Family Group Plan, please see the prospectus.
Family Single Student Plan
Designed as a transfer option from the Family Group Plan, the Family Single Student Plan offers more choice in the amount and timing of education assistance payments (EAPs). There is no shared income pool, you can reset the maturity date of your plan as needed and you may be able to withdraw income that isn’t used for EAPs or roll it into your Registered Retirement Savings Plan (RRSP).
You can transfer your contributions, income, government grants and grant income from your Family Group Plan to a Family Single Student Plan for the same beneficiary any time before the group plan matures.
For full details on the Family Single Student Plan, please see the prospectus.