RESP investing for busy parents

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Saving for university isn’t always top of mind when you’re a busy new parent, knee-deep in diapers. Add the steep cost of daycare along with the stress of trying to juggle work and toddlerhood, and setting aside funds for your child’s post-secondary education can feel like an insurmountable task parents have neither time nor money for. And, so, it gets put off. According to an August 2020 report from Statistics Canada, 50% of all post-secondary students graduate with a median debt of $17,500. Faced with the economic uncertainty brought about by the COVID-19 pandemic, longer-term financial planning may not feel like a priority for some families. But the truth is that putting a plan in place for your child’s post-secondary education is more important than ever now; with the end of the pandemic still uncertain, it’s a way to start getting ahead of future uncertainty. The good news is that CST Spark makes setting up a Registered Education Savings Plan (RESP) a snap. Parents can control exactly how much or how little they want to contribute at any given time. CST Spark’s RESP*—called CST Bright Plan—is a simple, convenient, flexible way to save for post-secondary education, giving parents the ability to start with as little as $10 a month. Here’s the rundown:

Sign up online

CST Spark is the digital-first subsidiary of the oldest education savings organization in the country, The Canadian Scholarship Trust Foundation (CST). “We are proud of our 60-year journey for CST. We were pioneers in our early days with the introduction of education savings, and we’re pioneers now in the digital age. CST Spark is one of the first to offer our RESP product online to parents who have grown up in the digital world,” says Paul Steedman, the Chief Information Technology and Digital Sales Officer for CST Spark. Today’s parents can read up about CST Spark’s offerings online and then sign up using the streamlined digital application process—all online in just a few minutes or over the phone from the comfort of your home.

Investments are professionally managed, with competitive fees

And once your RESP is set up, CST Spark will manage your contributions in a diversified mix of assets including Canadian fixed income, Canadian equities, U.S. and international equities and global real estate. CST Spark also uses a unique age-rebalancing technique to adjust your investment as your child ages with a goal of maximizing growth early and preserving gains closer to graduation. To ensure the safety of your principal, the plan gradually shifts more heavily towards fixed income investments as your child’s 18th birthday nears, and away from equities which tend to be riskier. “Combining a competitive fee with our industry knowledge, depth of experience and a unique investment strategy, we aim to maximize returns over the lifetime of the plan,” Steedman says.

Don’t miss out on government grant money

Your contributions, and the return on those investments, aren’t the only way an RESP helps to save for your children’s education. Both federal and provincial levels of government offer grants that can be combined and invested along with your own contributions. The Canada Education Savings Grant (CESG) is available to anyone with an RESP, matching 20% of your annual contributions, up to $500 per year and a lifetime maximum of $7,200 per child. British Columbia and Quebec also offer contributions to RESP-holders residing in those provinces. Families with lower household incomes qualify for additional grants as well. The Canada Learning Bond is a federal grant that contributes $500 the first year of eligibility and then $100 for every subsequent year, up to $2,000 over the course of the RESP. Steedman notes that these grants are among the key benefits of an RESP over other types of savings tools, and wants to make sure parents are able to take full advantage of them. CST Spark applies for grants on your behalf and then invests them accordingly, and parents can rest easy knowing that’s been taken care of.

Start early if you can—and know it’s never too late

By opening an RESP early, you are able to contribute more, max out government grants and have a longer window for your investment to grow. (Yes, you can sign up your newborn, provided you have your child’s social insurance number.) But if you haven’t set up an RESP yet, know that it is never too late. “We do have customers at CST Spark that have come to us with teenagers,” Steedman says. “They have a shorter investment window and wouldn’t be able to receive as much in government grants, but there’s nothing that prevents them from starting to save for their child’s education to make an impact.” All RESPs at CST Spark are also family plans by default, which means additional children can easily be added as beneficiaries and the earnings can be used for any of them. If one child goes on to do less post-secondary education than their siblings, for example, the savings can be allocated to your other kids.

Now that you have gotten to know CST Spark, why not enter their Spark Their Potential Contest*—there’s no purchase necessary, and it could land you $2,500 in an RESP from CST Spark. CST Spark’s representatives will answer any questions, give you tips and tricks on how to save for your child’s bright future, share even more RESP benefits, and enter you into the contest—all commitment-free. This is a sponsored post in partnership with CST Spark. C.S.T. Spark Inc. is the exclusive distributor of CST Bright Plan, which is only sold by prospectus.

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mariette see says:

December 1, 2020 at 1:10 pm

CST helps ONLY if you leave the money with them. I was told when i signed up that i could transfer out any time to another financial institution with only a 50$ fee, they actually took more then 3000$ from me. I only transferred out because others who had used CST found it hard to get their money out when their children attended college and a few had to postpone enrolment due to the funds not being available on time… i now have my resp at a bank and it is so much easier to deal with and you still get the government grants.
Vishal says:

December 31, 2020 at 8:58 pm

CST spark is a horrible RESP investment with fees above 5k – all frontloaded. Thanks but no thanks. There are hundreds of better options out there. Roboadvisers now charge 0 fees and give better investment returns. One can choose ETFs like VGRO for 0 fees and less than .25% MER. Any smart parent should avoid CST with its Blackbox of fees.
Ronalad Brown says:

April 4, 2024 at 9:03 pm

Did CST pay for this article? Almost impossible to find any truly independent financial advisor or financial blogger who recommends a group RESP. What about the front-loaded fees? What about the lack of flexibility? What about the lack of transparency? What about the penalties if you want to leave or transfer to another plan? What about the class action lawsuit in Quebec that names CST?

Come on Money Sense, do better.