I'm familiar with the Individual and Family types of Registered Education Savings Plans (RESPs).

There's also a third type: Group (pooled) RESPs, which I mentioned in this answer. I didn't provide much detail about Group RESPs in that answer.

How exactly do Group RESPs work? What are the various advantages and disadvantages of Group RESPs?


Group RESPs are a bit like a true mutual insurance company.

You all pay into the fund, and then, depending on the number of kids that are in school that particular year, you get paid a certain amount.

Advantages could be that if you end up with one or two years of only your kid in school and nobody else's in that age bracket, you get more money.

Disadvantage for the same-reverse reason also could be true.

Another advantage of regular programs, unlike pooled, is that if you do not use all the money, then some/all of the remaining funds may be transferable to an RRSP.

Personally I would not invest in one, unless it was more like a specific investment-club that I knew everybody.


I would stay away form these. I have had clients gave real problems when it comes to withdrawing the money...not only do you not have control of the investments themselves, but you also do not have a lot of control when it comes time to withdraw the money. I have also heard from one client that the fees can be outrageous. There was a securities commission investigation a few years back because a number of salespeople were over-promising. My suggestion would be to find someone independent, with access to a number of different products, who can advise you.

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