Grants Available for RBC Direct Investing RESPs

Types of RESPs & Investment Choices

There are two types of RESPs, each with specific uses and advantages.

Family RESP

Subscribers can name one or more sibling beneficiaries in the same plan.
Beneficiaries must be connected by blood relationship or adoption to each living subscriber or to a deceased original subscriber
Children, grandchildren, adopted children and stepchildren are fully eligible but nieces and nephews are specifically excluded
Allows flexibility – you don't have to split the money evenly between beneficiaries.
If one child doesn't attend post-secondary school, under certain circumstances, the grant money can be transferred to other beneficiaries.

Individual RESP

Subscribers can name one beneficiary.
Can be opened by anyone to save for a child's education.
Sometimes used in families where there are large age gaps between children.

You can choose to be a sole or joint subscriber for either an individual RESP or a family RESP. Joint subscribers who open a joint RESP must be spouses or common-law partners of each other.

What Investment Choices Are Available for RESPs?

As with most investment accounts, you have access to a broad selection of investment choices and qualified investments, including stocks, options, exchange-traded funds (ETFs), mutual funds, bonds and guaranteed investment certificates (GICs).

Also Good to Know...

You can't hold U.S. dollars in RESP accounts at RBC Direct Investing. While all U.S. trades will settle in Canadian dollars, you will still see the U.S. dollar-denominated equivalent for your account. Any foreign income received (dividends or interest) will automatically convert to Canadian dollars.
If you choose to include investments in your RESP that pay foreign dividends, many governments — including the U.S. — apply a non-resident withholding tax to dividends and interest. Withholding taxes are unrecoverable, and may reduce your potential returns. The IRS imposes a 30 per cent withholding tax to dividends paid on U.S. stocks – which can be reduced to 15 per cent by submitting a W-8BEN or W-9 form. Check with your tax advisor to learn more.

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