Frequently Asked Questions

Embark Student Corp. is Canada’s expert RESP company. Managing RESPs for more than 600,000 students, education savings and planning is all we do. Each year, we help approximately 60,000 Canadians attend post-secondary school with the help of one of our RESPs. Since our inception, we’ve paid out approximately $8.1 billion to students as part of their education savings.

We’re owned by a not-for-profit foundation, called the Embark Student Foundation. With no shareholders, the profits we make that aren’t reinvested into the business are put towards supporting students. To date, our foundation has given over $57 million to students and families across Canada.

No, all registered education savings plans sold and managed by Embark are individual or family RESPs. Embark does not offer group RESP plans.

No, Embark only manages and sell individual and family RESPs.

No, Embark does not charge an upfront sales fee on any of its products or plans. All Embark plans solely charge a management fee of 1.65% + HST every year, which is very competitive when compared to other long-term savings products.

No, Embark does not charge any fees on withdrawals.

No, the only fee an Embark customer will pay when saving with an Embark RESP is 1.65% + HST management fee per year. This fee covers all costs related to investing, managing and administering your plan.

When you contribute towards your RESP, we will invest each child’s savings according to their age and time to graduation, so you can just set it and forget it.    Each child’s investments will focus on growth (higher equity focus) when they are young. As your child ages, the investment mix will shift, becoming increasingly conservative over time (more fixed income focus) to preserve your savings as they near post-secondary school.    At the end of the year that they turn 17, and are no longer eligible for grants, we will shift their savings into a capital preservation fund.

You may contribute to your plan by setting up a pre-authorized contribution that will be debited from your bank account. You may also contribute using the bill pay function of your bank account through your financial institution.   To set up a pre-authorized Contribution: 

• Sign into your Embark account 
• From your Dashboard or Main Menu, select “Contributions” 
• Follow the on-screen instructions

Yes, Embark offers the option to have multiple pre-authorized contributions (PAC) within the same plan.    Contributions don’t need to be the same frequency or come from the same bank account.

Yes, you can set up a pre-authorized contribution plan from your bank account to help you regularly save through our digital platform.   You may also set up recurring bill payments from your bank account at most Canadian financial institutions.   If you need to stop your scheduled contributions, you can do so and manage all of your pre-authorized contributions and linked bank accounts through your secure account.

If you are getting warnings about how much you can set for your pre-authorized contribution, or your household income is less than $40,000/year, you will need to speak with one of our Education Savings Specialists to ensure you are setting up the best plan for your circumstance.

Absolutely, we encourage lump sum contributions when you have extra funds; the lifetime contribution limit is $50,000.  Just remember that you’ll typically only attract grants on the first $2,500 contributed per year and up to $5,000 if you have the carry-forward room.

You may request a return of some or all of your contributions at any time.    At Embark, we have simplified these withdrawals so that you can withdraw your funds in the least possible steps and with maximum ease. Just let us know if the withdrawal is for education or not, and we will do the work for you.

Management fee  Embark will charge 1.65% MER annually plus applicable taxes. This means we’ll take or $16.50 for every $1,000 invested plus applicable taxes, deducted directly from plan earnings, or if earnings or insufficient, from contributions.  The Embark prospectus does allow for the MER to be increased to a maximum of 1.99% per year, plus applicable taxes. For example, this would be a maximum of $19.90 for every $1,000 invested.  This fee pays for investment management costs, operating, managing, and administering the Plan, including record keeping, trustee, valuation, distribution, and custodial services. Independent Review Committee Fees As required for all publicly offered investment funds, this fee is to pay the IRC members and secretariate for providing independent review committee services for Subscribers.  The costs are shared proportionately with all Embark Corp. Plans (including the grandfathered plans: Flex First and Family Single Student). The following are the annual fees to be paid to the IRC:

• Chairperson - $20,000 (plus GST/HST)
• Each Member - $15,000 (plus GST/HST)
• Secretariat fee - $40,000 (plus GST/HST)

Your Embark RESP statements can be found in your online Embark account. If you had a Knowledge First Financial Flex First or a Knowledge First Financial Family Single Student Plan and require access to those statement, please call us at 1-800-363-7377

When you complete the RESP application, Embark will automatically apply for government grants on your behalf.  There are additional grants that your beneficiary(ies) may be eligible to receive, depending on the province of residence and/or their household net income. We’ll help you get all of them, including:   The Canadian Education Savings Grant (CESG): this grant is provided by the Canadian government and is the cornerstone of contribution matching. The government matches your contributions up to $7,200 over the lifespan of your RESP. You’ll receive a grant of 20% of whatever you contributed, up to a maximum of $500/year. Once you’ve set up your Embark Student Plan, we automatically apply for this grant on your behalf.   If you started late or contributed less than $2,500/year in previous years, you can carry forward those missed amounts to current or future years. Read more about carry forwards.   Additional CESG: Lower- and middle-income families may qualify for an additional amount of CESG or ACESG, which means an extra 10% or 20% are applied to the first $500 of annual contributions each year.     Eligibility depends on the adjusted income level of the child’s primary caregiver. The income levels are updated every year.   The maximum amount of CESG, including the Additional amount, a child can get is $7,200.   CESG eligibility restrictions for children aged 16 or 17   Children who are 16 or 17 years old may be eligible to get the CESG. To be eligible, they must meet at least one of the following conditions before the end of the calendar year they turn 15:   at least $2,000 is contributed to (and not withdrawn from) the RESP   a minimum annual contribution of $100 is made to (and not withdrawn from) the RESP in any four previous years   Canada Learning Bond (CLB)- is money that the Government adds to the RESP for children from low-income families. There are no contributions required to receive the CLB.    This includes $500 for the first year of eligibility and $100 each year the child continues to be eligible (up to and including the benefit year in which they turn 15).   Income eligibility depends on the number of children in a family and adjusted net family income. More information can be found here.   CLB for 18- to 20-year-olds   Eighteen to 20 year olds may be eligible to receive the CLB; you could get up to $2,000 into an RESP.   The amount of money you will receive depends on the number of years you were eligible to receive the CLB, before you turned 15 years old.   If an 18- to 20-year-old was eligible for the CLB and has not received it yet, the Government of Canada will deposit into an RESP: $500 for the first year that you were eligible, and $100 for each additional year you were eligible up to the age of 15   More information about eligibility can be found at https://www.canada.ca/en/services/benefits/education/education-savings/learning-bond-18-20/eligibility.html    British Columbia Training and Education Savings Grant (BCTESG): is a one-time payment of $1,200 per child paid to beneficiaries who are residents of BC and whose parent is a BC resident at the time the grant application is made.    Applications for the BCTESG can be made between the day the child turns  six and the day before the child reaches their ninth birthday.    Quebec Education Savings Incentive (QESI):  If your child is a resident of Quebec, you could earn up to $3,600/child as part of the Quebec Education Savings Incentive (QESI). This grant is provided as a refundable tax credit from Revenu Québec that is deposited directly into your RESP.   If eligible, you will receive a grant equalling 10% of your annual RESP contribution –up to $250 per year, with a lifetime maximum of $3,600 per child. Depending on your income, you can earn an extra 5 to 10% of the first $500 contributed each year.   Additional QESI: to help low- and middle-income families, an additional amount of up to $50 per year, calculated on the basis of family income, may be added to the basic amount, based on your income and annual contribution. www.revenuquebec.ca/documents/en/publications/in/in-129-v%282015-10%29.pdf

Within the basic Canada Education Savings Grant, the government matches 20% of the first $2,500 you contribute to your RESP, annually. This gives you an extra $500 in grants each year if you maximize your savings.   Children from middle- and low-income families might be eligible to receive an Additional CESG. If you are eligible, an extra 10% or 20% will be added to the first $500 you contribute to an RESP each year, allowing you to grow your plan faster.    Keep in mind that the total combined lifetime maximum for the CESG and ACESG is $7,200 per beneficiary.

The Canada Learning Bond provides a one-time initial grant payment of $500 to an eligible beneficiary’s registered education savings plan. The government will automatically add $100 for each year of eligibility until your child is 15 years old. Over time, that could add up to as much as $2,000 in grant payments, plus interest. Eligibility is based on adjusted net family income and number of children. Learn more about the CLB here.

If you don't contribute enough to receive the maximum $500 CESG grant each year, the unused contribution room can be carried forward to the next year.   Learn more about carry forward room here.

Yes, there is an age limit for opening an RESP to qualify for grants. For CESG eligibility, the RESP must be opened before the end of the year the beneficiary turns 15. In order for 16- and 17-year-olds to received CESG and ACESG, certain conditions need to be met. Children born in 2004 or afterwards are eligible for the CLB. If the CLB has not been applied for previously, once a child reaches the age of 18, they can apply for the CLB on their own through a RESP promoter. They must make the application before their 21st birthday.

Yes, you can carry forward unused grant room. If all the basic CESG in any given year has not been collected, it is carried forward and is available to collect in future years. The government will allow contributions up to $5,000 a year to collect grant, which includes the grants of up to $500 for the current year, plus up to $500 of grant from the past years (provided there is accumulated grant room to be carried forward).

In some cases, you may want or need to withdraw money from your RESP for non-educational purposes.    While you may withdraw your contributions at any time without being taxed, the withdrawal of any income earned on your contributions from an RESP is taxed (that withdrawal is called an Accumulated Income Payment or “AIP”).    To withdraw your investment income, your RESP needs to have been open for at least 10 years, or your beneficiaries must be over the age of 21 and not currently pursuing a post-secondary education.   In addition, withdrawing your contributions may also result in the government clawing back grants that it had previously contributed to your RESP, so it is wise to be aware of such implications.    Grants and the income you earn on them will also need to be returned to the government if it is not used while your child is in post-secondary school.   For more information on what you can and can’t do, please take a look at the CRA’s website.

In order to eliminate or ease the tax impact of receiving an AIP, the subscriber may want to transfer the accumulated income to his or her RRSP or to a spousal RRSP. This helps avoid having to pay taxes on the amount, as long as the subscriber has unused RRSP contribution room and does not exceed the age limit for making RRSP contributions.    When the transfer takes place, the plan is terminated. Any remaining contributions are returned to the subscriber and any remaining grants are returned to the corresponding government. The maximum amount of the accumulated income that is available for transfer is $50,000 per subscriber.

Typically, you can expect your withdrawal request to be fulfilled within two business days of being processed. Please note that fulfilment may be delayed if the request requires a review.

It is typically wise to front-end load your withdrawals with taxable educational assistance payments (EAP) and withdraw your contributions when all else is depleted.   This is because your investment income, which is included in an EAP, is subject to significant taxation when withdrawn, should the child stop, not attend or finish school. Grant and grant income are also clawed back by the government if it is not used while the student is in school and the plan is closed.   It also makes sense on the assumption that a beneficiary may have lower income from other sources (summer or part-time jobs, for example) in the early years of their post-secondary education as compared to their later years (e.g. co-op placements), allowing you to maximize the value of your savings.   Investment income can be transferred into a subscriber’s Registered Retirement Savings Plan account to the extent they have RRSP room.

AIP (Investment earnings in a Registered Education Savings Plan that may be paid to the subscriber, generally if it’s determined the beneficiary will not attend post-secondary and use the grants and income in their RESP – conditions apply) withdrawals are considered income from a tax perspective, and are subject to two different taxes: the regular income tax and an additional withholding tax of 20% (12% for residents of Quebec). If you opt to withdraw the investment funds from your RESP as an AIP in to your bank account (vs. transferring this amount to an RRSP), Embark is obligated to deduct 20% withholding tax (or 12% for residents of Quebec) PLUS a deduction of income taxes, which we send to the Canada Revenue Agency (CRA), and report on a T4A slip that is sent to the CRA and to the recipient of the AIP. This is not a fee paid to Embark, it’s tax being paid to the CRA. It is important to note that Embark does not have any knowledge of a customer’s tax rate and follows the same CRA guidance that an RRSP withdrawal is subject to. While the deduction may seem large upfront, it ensures you won’t owe additional taxes when you file your income tax return and may even result in a tax refund.

Many eligible Subscribers reduce the tax owed on the AIP by transferring it directly to an RRSP or a spousal RRSP, up to a lifetime maximum of $50,000 in the year the AIP is paid and provided that your RRSP deduction limit allows for the amount.

No, contributions to a Registered Education Savings Plan (RESP) are not tax deductible. However, the earnings on those contributions grow tax-free while they remain in the plan.

• The money in an RESP comes from contributions, government grants, and investment growth.
• The investment income in an RESP is tax-sheltered, similar to a TFSA, which means you or your child are not taxed till the day you withdraw from the plan.
• When the money is withdrawn from the RESP for educational purposes, the investment income and government grants (called an Education Assistance Payment or EAP) are taxed to the student (beneficiary), but your contributions are not.
• The student who receives the money is usually in a low tax bracket, so they may pay little or no tax on the government grants and any market growth (income).