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How to Invest an RESP: Complete Guide

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Investing in a Registered Education Savings Plan (RESP) is a wise decision for parents looking to save for their child’s future education. An RESP offers tax advantages and the potential for investment growth over time.

In this comprehensive guide, we will explore various investment strategies and considerations to help you make informed decisions about how to invest your RESP funds effectively, balancing risk and potential returns.

Understand Your Investment Options

a) Savings Account:

A savings account is the simplest and lowest-risk investment option for an RESP. It offers a fixed interest rate, ensuring the safety of your principal investment. However, the returns are relatively modest compared to other investment options.

b) Guaranteed Investment Certificates (GICs):

GICs provide a fixed rate of return over a specific period. They are low-risk investments, making them a popular choice for conservative investors. GICs offer a predictable return, but the potential for growth is limited compared to other investment options.

c) Mutual Funds:

Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. They offer a range of risk profiles, from conservative to aggressive, allowing you to align your investment strategy with your risk tolerance and time horizon.

d) Exchange-Traded Funds (ETFs):

ETFs are similar to mutual funds but trade on stock exchanges like individual stocks. They provide diversification across multiple assets, sectors, or indices. ETFs offer flexibility, transparency, and potentially lower management fees compared to mutual funds.

e) Individual Stocks and Bonds:

Investing in individual stocks and bonds requires a higher level of knowledge and expertise. It can offer the potential for higher returns but also carries a higher level of risk. Consider consulting with a financial advisor before pursuing this option.

Consider Your Risk Tolerance

a) Conservative Approach:

If you have a low-risk tolerance, consider investing primarily in lower-risk options like savings accounts and GICs. While the potential for growth may be limited, these investments provide stability and help protect your principal investment.

b) Balanced Approach:

A balanced approach involves diversifying your portfolio across different investment options, such as mutual funds or ETFs. This strategy aims to balance risk and potential returns, providing a moderate level of growth while managing risk.

c) Aggressive Approach:

For those comfortable with higher levels of risk, an aggressive approach involves investing in higher-risk options like individual stocks or equity-based mutual funds. This strategy offers the potential for greater returns, but it is important to carefully research and monitor investments.

Time Horizon and Investment Horizon

a) Consider the Time Until Withdrawals:

The time horizon for your RESP investments is closely linked to the anticipated time until your child starts post-secondary education. If the time horizon is shorter, you may opt for more conservative investments to protect the principal. For longer time horizons, you may consider a more growth-oriented approach.

b) Adjust Investment Strategy Over Time:

As your child approaches post-secondary education, gradually shift your investments towards more conservative options to safeguard the accumulated funds. This process, known as the “glide path,” aims to protect capital from potential market downturns.

Seek Professional Advice

a) Consult with a Financial Advisor:

If you are unsure about investment options or need personalized guidance, consider consulting with a qualified financial advisor. They can help assess your risk tolerance, time horizon, and investment goals to develop a tailored investment strategy for your RESP.

b) Research and Educate Yourself:

Even if you consult with a financial advisor, it is essential to educate yourself about investment concepts, strategies, and risks. Understanding the fundamentals of investing empowers you to make informed decisions and actively participate in managing your RESP.

Monitor and Rebalance Your Portfolio

a) Regularly Review Your Investments:

Monitor the performance of your RESP investments periodically, ideally on an annual basis. Assess whether they align with your investment objectives and make adjustments as necessary.

b) Rebalance Your Portfolio:

Over time, your investments may drift from your intended asset allocation due to market fluctuations. Rebalancing involves selling or buying investments to realign your portfolio with your target asset allocation. This process helps maintain your desired risk level.


Investing an RESP requires careful consideration of investment options, risk tolerance, and time horizons. By understanding your investment options, assessing your risk tolerance, and seeking professional advice when needed, you can develop a tailored investment strategy for your RESP.

Remember to monitor and periodically review your investments, ensuring they align with your goals and making adjustments as necessary. With prudent investment decisions, your RESP has the potential to grow and provide the necessary funds to support your child’s educational aspirations.

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