# Investing childrens' education fund



## larry macdonald (Jun 25, 2009)

I'm doing some research into how people invest for their children's post-secondary education. It seems TD e-Series index funds within an RESP are a popular choice. Anyone doing it differently? What about other options outside an RESP like universal life insurance policy, group scholarship plans, pay off debt now to free up cash flow during university years, in-trust accounts, CTB/UCCB invested in account, monthly income funds, tax-advantaged mutal funds, TFSA, age 40 trust etc. Is anyone using them instead or as supplements?


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## scomac (Aug 22, 2009)

While we were in the accumulation phase we made regular monthly contributions into a monthly income fund in our kids RESP. The gov't grant money went into this as well. We contributed $2000/yr./child in order to collect the maximum gov't grant. Once the oldest was within a year or two of post secondary we began to convert a portion of the assets into a bond ladder to cover the withdrawals for the oldest's undergraduate studies. When we quit making contributions, we then converted the balance of the funds into additional rungs in the bond ladder. This was our strategy and it has served us very well.


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## Berubeland (Sep 6, 2009)

I am low income so I get all the additional top ups. I have chosen to deposit all my monthly CCTB and UCCB and all the monies the government sends me into the RESP set up with Investors Group. I was thinking of doing a self directed RESP but then you cannot get the other top ups given by the government all you can get is the regular 20% grant. 

I have it preauthorised payments for the 21st of the month the day after they deposit the Baby Bonus money. 

So far I have contributed around $7500 and gotten over $10,000 in there. I made 6 % on the overall investment.


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## Dr_V (Oct 27, 2009)

larry macdonald said:


> Anyone doing it differently?


I'm planning (as in: I filled out the paperwork, I just haven't submitted it yet) on setting up a self-directed RESP at TD Waterhouse for my 7-week old son. (All of my investments are currently self-directed, and I feel very comfortable doing this.)

My plan is likely to hold a fairly conservative mix of blue chip, dividend-paying stocks for the first ~10-15 years, and as he approaches college/university age, I'll probably begin rolling money over into less volatile assets.


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## MoneyGal (Apr 24, 2009)

Berubeland: 

The UCCB is taxable in the hands of the lower-earning-spouse, no matter where the money ends up (inside an RESP or not). 

The CCTB is non-taxable income, so there's no particular advantage to depositing it in an RESP. 

A self-directed RESP does not attract fewer grants than an IG RESP. 

I don't know where you heard this info, and I worry it might have been from your IG salesperson...


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## CanadianCapitalist (Mar 31, 2009)

MoneyGal said:


> A self-directed RESP does not attract fewer grants than an IG RESP.
> 
> I don't know where you heard this info, and I worry it might have been from your IG salesperson...


Actually, unless something changed recently, it does. TD Mutual Funds, for instance, is set up to receive the 20% CESG but not the additional grants available for low-income households.

http://www.hrsdc.gc.ca/eng/learning/education_savings/publicsection/new_promoter_list.shtml


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## MoneyGal (Apr 24, 2009)

Sorry, CC; I understood the OP to indicate that somehow UCCB and CCTB are components of his RESP contribution which are not available elsewhere. 

To the best of my knowledge, either you are eligible for the enhanced grant, or you are not; and the HRSDC list simply indicates which providers are set up to automatically apply for and deposit the grant (as opposed to the parent applying and then having the grant money issued and deposited).

When I was an advisor, I worked at a brokerage on the IDA platform. RESPs were our least favourite kind of account to open, because they involve an immense amount of paperwork and they are relatively small. 

It isn't surprising to me to read that the companies that *only* offer RESPs are, of course, set up to automatically apply for etc. the enhanced grants. 

I'm going to check my assumptions about this and come back later. Now, off to soccer practice!


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## Four Pillars (Apr 5, 2009)

Self-directed RESP accounts are definitely eligible the "extra" resp grants. Not all companies provide them however. 

As CC pointed out the TD efunds resp does not allow for the extra grants. I believe the normal TD mutual fund account does allow these extra grants (but you can't buy cheap efunds in that account) and there is a monthly fee? RBC direct is another one that doesn't offer these grants. Questrade does allow the extra grants in their RESPs. 

I suspect that if you are eligible for the extra grants then you might be better off with more expensive mutual funds (even at IG) rather than TD efunds (which would mean foregoing the extra grants).

Best thing to do would be shop around - IG has some of the highest MERs around. There has to be something cheaper that pays the extra grants.


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## Dana (Nov 17, 2009)

*Real Estate*

Our kids have RESPs - though we haven't been diligent about maxing them out. We have also purchased income property for our kids futures. Our reasoning is this:

they properties will be paid off when each child is finishing high school
They can use the income from the property to cover their expenses or
they can sell the property and use the proceeds to fund their endeavors or
they can live in one unit and use the cash flow from the others (the properties are multi-residential)

Not everybody pursues traditional post-secondary education and we want our kids to have an option should they decide to go into business for themselves, work/learn abroad, or pursue graduate programs that their RESPs and other savings wouldn't have covered. 

This seemed like the right solution for us...


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## CanadianCapitalist (Mar 31, 2009)

MoneyGal said:


> To the best of my knowledge, either you are eligible for the enhanced grant, or you are not; and the HRSDC list simply indicates which providers are set up to automatically apply for and deposit the grant (as opposed to the parent applying and then having the grant money issued and deposited).


That's interesting. I didn't know that parents can apply and have the grant money issued and deposited into the RESP account themselves. Anybody know how this is done (i.e. which forms should be filled out and the logistics of how to get the grant money deposited into the RESP account)


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## HaroldCrump (Jun 10, 2009)

CanadianCapitalist said:


> That's interesting. I didn't know that parents can apply and have the grant money issued and deposited into the RESP account themselves. Anybody know how this is done (i.e. which forms should be filled out and the logistics of how to get the grant money deposited into the RESP account)


Hi CC,
I did this earlier this summer.
My RESP A/C is with i*Trade and it was relatively easy to do so using their forms.
The forms are available here:
https://www.scotiaitrade.com/pages/home/formsb.shtml
Once it is sent to the institution, they fwd to CRA and everything is set up correctly.
You need to ensure that the primary holder of the RESP A/C is the same spouse that is receiving the CCTB payments.
You may open a joint RESP A/C but the receipient for the CCTB must be the primary account-holder.
This is true for single beneficiary as well as family plans.


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## HaroldCrump (Jun 10, 2009)

larry macdonald said:


> I'm doing some research into how people invest for their children's post-secondary education. It seems TD e-Series index funds within an RESP are a popular choice. Anyone doing it differently? What about other options outside an RESP like universal life insurance policy, group scholarship plans, pay off debt now to free up cash flow during university years, in-trust accounts, CTB/UCCB invested in account, monthly income funds, tax-advantaged mutal funds, TFSA, age 40 trust etc. Is anyone using them instead or as supplements?


Hi Larry,
We opened RESP accounts for our kids this summer.
This year's contribution and grant is still sitting as cash, but I plan to deploy early next year.

My plan is as follows:
- Build a bond ladder of good-quality bonds with the contribution portion of the account. Keep bond duration short (i.e. 5 years or less).
- Every year keep purchasing bonds as above. Time required for bond selection will be a few days of research and screening every year.
- Invest the CESG grant portion (20% up to the limit) into an equity index (XIU most likely).
Time to invest and monitor this component is fairly minimal.
- As education time gets closer, downsize the equity index and move into cash or very safe Govt. bonds.

This is only a plan for now.
I'll have to wait and see how well this works out and whether I'm able to keep up the contributions year after year.


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## CanadianCapitalist (Mar 31, 2009)

HaroldCrump said:


> Hi CC,
> I did this earlier this summer.
> My RESP A/C is with i*Trade and it was relatively easy to do so using their forms.
> The forms are available here:
> ...


Thank you Harold. I sometimes receive questions on how to get extra grants if the account is not set up to receive it automatically. Now, I know where to point them


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## Four Pillars (Apr 5, 2009)

CanadianCapitalist said:


> Thank you Harold. I sometimes receive questions on how to get extra grants if the account is not set up to receive it automatically. Now, I know where to point them



I think this was more or less answered by Harold Crump but I want to emphasize that you don't apply directly to the government for any of these grants. You always have to go through your RESP provider and they will forward the forms to the HRSDC for approval.

I believe form SD 0071 is the one normally used for the basic grant plus additional grants. You can find the government forms here:

http://www.hrsdc.gc.ca/eng/learning...ications_resources/promoter/forms/index.shtml

If someone is looking to set up an RESP the main points to know are:

Does the RESP provider offer the extra grants (if applicable). If yes then make sure they fill out the forms with that in mind and make sure you are getting the extra grants.


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## HaroldCrump (Jun 10, 2009)

Four Pillars said:


> Does the RESP provider offer the extra grants (if applicable). If yes then make sure they fill out the forms with that in mind and make sure you are getting the extra grants.


I take it that by "extra grants" you mean CLB and other top-ups for low income families?
If so, those are automatic based on your previous year's tax returns.
Once CRA has received your RESP account information, from that point on, everything should be automatic.
Just like the CCTB - they adjust that upwards or downwards every year based on your tax return.


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## CanadianCapitalist (Mar 31, 2009)

I'm confused now. This HRDC page mentions which promoters are set up to receive all the grants one is eligible for:

http://www.hrsdc.gc.ca/eng/learning/education_savings/publicsection/new_promoter_list.shtml

Some of the promoters (such as the asset management arms of the big banks) are not set up to receive *all* the grants. Doesn't it mean that supplying the promoter with another set of forms won't help? Curiously, iTrade or E*Trade doesn't seem to be listed in that page.


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## FrugalTrader (Oct 13, 2008)

A slightly different train of thought, but if I wanted to contribute to my nephews RESP, can I contribute directly without having to write a cheque to his parents to deposit?


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## HaroldCrump (Jun 10, 2009)

FrugalTrader said:


> A slightly different train of thought, but if I wanted to contribute to my nephews RESP, can I contribute directly without having to write a cheque to his parents to deposit?


You will need to formally open an RESP account with your nephew as a beneficiary.
You need this form:
http://www.docs.scotiaitrade.com/pdf/etca_CESG_other_eng.pdf


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## OhGreatGuru (May 24, 2009)

larry macdonald said:


> ... What about other options outside an RESP like universal life insurance policy, group scholarship plans, pay off debt now to free up cash flow during university years, in-trust accounts, CTB/UCCB invested in account, monthly income funds, tax-advantaged mutal funds, TFSA, age 40 trust etc. ...


Universal Life Insurance - not generally a good return on investment, and certainly not for RESP.

Group Scholarship Plans - If they're the ones I'm thinking of, they are pretty much passe since the advent of RESPs. Investors don't get their money (and earnings) back if the child doesn't go to post-secondary education; ROI is questionable.

Pay off debt to free up future cash flow? This is always a good consideration.

In-Trust accounts: can be complicated from a legal/tax point of view. RESPs are a lot simpler.

Monthly Income Funds, Tax-advantaged Funds. This isn't a question about how to save so much as what to invest in. Really a separate topic.

TFSA: At least use RESP first to maximize the federal grant. For contributions beyond that, TFSA makes sense, as offering more flexibility on who can withdraw, and withdrawals aren't taxable even in the hands of the student.


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## Berubeland (Sep 6, 2009)

CanadianCapitalist said:


> I'm confused now. This HRDC page mentions which promoters are set up to receive all the grants one is eligible for:
> 
> http://www.hrsdc.gc.ca/eng/learning/education_savings/publicsection/new_promoter_list.shtml
> 
> Some of the promoters (such as the asset management arms of the big banks) are not set up to receive *all* the grants. Doesn't it mean that supplying the promoter with another set of forms won't help? Curiously, iTrade or E*Trade doesn't seem to be listed in that page.


The financial institution which holds your RESP applies for all the grants you are eligible for.

Anyone can get the 20% CESG but if you are low income like me you get an extra $500 the first year for starting the RESP and an additional grant with every further contribution up to a certain amount. 

I very carefully researched this issue and I did not find any company that offered self directed RESP that also was allowed to apply for the Canada Learning Bond and Canada Learning Bond Fee. They also would not offer the Additional Education Savings Grant. 

TD did offer this but only with a GIC RESP. I can tell you I was exhausted by this time.... Investor's Group did apply for all the grants, they did not charge any fees whatsoever except the MER. The CLB alone is worth $500 plus $100 per year. I knew the guy and he beat the pants off the CST people who couldn't even tell me how much interest my money would earn. It drove me crazy, they just kept telling me over and over about how much the government was giving but would not even answer the question of how much interest that money would earn once it was in their tender care. To this day I have no idea how much and i met with that lady twice and called a few others. So for me the fact that the MER's were higher was irrelevant no MER could be higher than $500 CLB and additional savings grant.


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## Four Pillars (Apr 5, 2009)

Four Pillars said:


> Does the RESP provider offer the extra grants (if applicable). If yes then make sure they fill out the forms with that in mind and make sure you are getting the extra grants.





HaroldCrump said:


> I take it that by "extra grants" you mean CLB and other top-ups for low income families?
> If so, those are automatic based on your previous year's tax returns.
> Once CRA has received your RESP account information, from that point on, everything should be automatic.
> Just like the CCTB - they adjust that upwards or downwards every year based on your tax return.


No, they aren't automatic.

When the resp account is first set up the resp promoter has to send the form to the HRSDC. I linked earlier to form SDE 0071 which is the main form used. 

If you look at the top of the first page there are check boxes for basic grant, additional grant and CLB. If you only apply for the basic cesg grant then you would just check the first box and only fill out part A (subscriber info). To apply for the additional grants you have to check the other boxes and fill out the other parts of the form (custodial parent and primary caregiver info). 

In your case (I'm guessing) where you are the subscriber, guardian and primary caregiver and probably a lot of cases, the resp provider probably asked you to fill out the entire form and check all the boxes. Once this happens then that means you have applied for all the available grants and the process will be automatic from that point on (but you should still check the grants).

A lot of people (like myself) didn't fill in the extra sections because they know they won't get the extra grants. In retrospect this is kind of dumb because if I become unemployed or whatever then I have to submit the completed form again.

Another scenario is where the subscriber and primary caregiver are not the same person. My parents for example have an resp account for my niece. To apply for the extra grants would have meant getting the info from my sister which we didn't bother doing since at the time they didn't qualify for extra grants. Now, she probably does qualify and I have to get the forms filled out properly. Again, it would have been better to just apply for all the grants when opening up the account.


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## Four Pillars (Apr 5, 2009)

CanadianCapitalist said:


> I'm confused now. This HRDC page mentions which promoters are set up to receive all the grants one is eligible for:
> 
> http://www.hrsdc.gc.ca/eng/learning/education_savings/publicsection/new_promoter_list.shtml
> 
> Some of the promoters (such as the asset management arms of the big banks) are not set up to receive *all* the grants. Doesn't it mean that supplying the promoter with another set of forms won't help? Curiously, iTrade or E*Trade doesn't seem to be listed in that page.


That's correct - if provider doesn't have the ability to handle extra grants then you won't get them. The extra forms will be a waste of time.


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## Four Pillars (Apr 5, 2009)

FrugalTrader said:


> A slightly different train of thought, but if I wanted to contribute to my nephews RESP, can I contribute directly without having to write a cheque to his parents to deposit?


FT, I've been able to contribute to my niece's resp in the past but I know that sometimes financial institutions won't accept checks that have a different name on the account.

You should call the financial institution and see if they will accept a check from you. Unfortunately they might not because of the newer money laundering/anti-terrorist rules.

As Harold said, you can set up an resp yourself or give the money to your siblings (and hope for the best).


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## Four Pillars (Apr 5, 2009)

Berubeland said:


> ....
> 
> I very carefully researched this issue and I did not find any company that offered self directed RESP that also was allowed to apply for the Canada Learning Bond and Canada Learning Bond Fee. They also would not offer the Additional Education Savings Grant.
> 
> ...


This is the problem with the RESP program - it's too complicated, too expensive to administer and that's why only the high-cost companies can afford to offer the extra grants (which are a big money loser).

I think Berubeland is right - all the big mutual fund companies offer the extra grants so if you qualify then they are probably the best bet.

Alternatively, the extra grants are only applicable to the first $500 of contributions each year so someone who was really keen could set up one account with a high-cost provider (ie IG group) and only contribute $500 per year which would allow them to max out the extra contributions. 

Any additional contributions (up to $2k) could be made in a low-cost account like the TD e-fund which would only get the basic CESG.

I actually wrote a post a while back about how dumb the whole resp system is...way too much wasted money.

http://www.four-pillars.ca/2007/12/07/resp-my-suggestion-for-a-better-resp-program/


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## ecs.780 (Dec 2, 2009)

Hi everyone - I'm new to the forum. I have read a lot but never posted but I couldn't stay silent anymore. We've always had our RESP with TDWaterhouse - its self-directed, as we do all our own investing, however when Alberta introduced the extra grant for children born in Alberta starting in 2006 - TD Waterhouse's computer platform did not support the application of this grant. After mainly frustrating and almost painful phone calls and e-mails I landed on Q-Trade out of Vancouver - they were the only self-directed RESP that supported the Alberta grant (we also get extra l grants based on our income -but that is automatically calculated each year). It was explained to me that the RESP's are basically a low priority for companies and so the upgrades that would have been required by TD (by the Alberta Gov't) to allow their platform to apply for grants for was not an option at that time. We moved our account - fees are a bit more but we don't trade much in the account and someone actually answers the phone when you call!

Hope this helps someone - not all RESP providers are created equal.


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## Arcaneind (Apr 3, 2009)

*Nbdb*

I'm with National Banks Discount Brokerage and I don't know for sure, but I think they handle the RESP grants. We didn't qualify, but they asked if we were wanted to apply...

Slowly migrating our funds with DSC's over to no-load income funds now. Still trying to play catch up for under contributing for past years at the same time.


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## HaroldCrump (Jun 10, 2009)

CanadianCapitalist said:


> I'm confused now. This HRDC page mentions which promoters are set up to receive all the grants one is eligible for:
> Curiously, iTrade or E*Trade doesn't seem to be listed in that page.


It is - as Penson Financial Services, which is the broker for all RESP accounts at E*Trade.
I recall when I filled out the E*Trade application form for RESP, the promoter listed was Penson Financial.
Therefore, any RESP accounts held at i*Trade should be eligible for maximum possible govt. grants.

However, now that E*Trade has been completely taken over by Scotia Capital (which is now the settlement agent for all i*Trade transactions), it raises an interesting question whether the extra grants can continue since Scotia Capital doesn't appear to be on the full grants list.

I will call and ask next week.


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## HaroldCrump (Jun 10, 2009)

HaroldCrump said:


> However, now that E*Trade has been completely taken over by Scotia Capital (which is now the settlement agent for all i*Trade transactions), it raises an interesting question whether the extra grants can continue since Scotia Capital doesn't appear to be on the full grants list.
> 
> I will call and ask next week.


Finally managed to get thru to Scotia iTrade customer service.
According to them, additional CESG grants and other types of grants like CLB are _no longer_ possible in RESP accounts with iTrade.
If someone is eligible for additional grants and wants to continue receiving them, the only option is to transfer the RESP account to another institution.
Only the basic CESG grants of 20% every year is possible with iTrade.


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## ssimps (Dec 8, 2009)

HaroldCrump said:


> Finally managed to get thru to Scotia iTrade customer service.
> According to them, additional CESG grants and other types of grants like CLB are _no longer_ possible in RESP accounts with iTrade.
> If someone is eligible for additional grants and wants to continue receiving them, the only option is to transfer the RESP account to another institution.
> Only the basic CESG grants of 20% every year is possible with iTrade.


This should be added to the iTrade issues forum thread as well. How many more undocumented, and un-notified, changes are going to be made by Scotia since they changed the iTrade account numbers / back end? 

Is this even legal? i.e. a company changes the rules for accounts PRIOR to notifying customers of the changes?


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## ssimps (Dec 8, 2009)

BTW, we have our RESPs with Scotia bank itself in index mutuals funds (MER of about 1%). Should really switch to TD efunds for better MER but have not had the time to setup a TD bank account first, which I was told is needed to get access to the TD online efunds.


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## HaroldCrump (Jun 10, 2009)

ssimps said:


> Should really switch to TD efunds for better MER but have not had the time to setup a TD bank account first, which I was told is needed to get access to the TD online efunds.


TD bank account is not needed for eSeries account.
You will however get a TD Bank Card, which will be your online login account number.
You don't need to open a retail banking account just to get eSeries.


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## Maltese (Apr 22, 2009)

This thread is a timely one for me since my new granddaughter's birth certificate finally arrived (needed to get a SIN) and I hope to open an RESP this week.

Having had no idea that only certain institutions offer all the RESP benefits, I was planning to put money into the TD E-Funds via the regular TD money market route. 

Now I have to rethink this plan as my daughter may be eligible for all the grants due to her low income. I've checked the link provided and noted that TD offers the full function RESP but TD Asset Management and TD Securities don't. Does anyone know if it's possible to put $500 into a TD saving account RESP and $2000 into the MMF and then transfer money to the MMF to be converted into e-funds once the grant money has been received?

I need to figure out this out quickly so that the 2009 grant money is not missed. I look forward to hearing your thoughts on this.


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## Berubeland (Sep 6, 2009)

Dear Maltese,

You can not "miss" it even if you do it later in 2010 you will still be eligible for 2009 contribution and grant amounts. 

It took me 9 months to do mine and I still got all the contribution room and grants. Of course I did not get the benefit of the interest. 

The only TD RESP that applied for all the grants when i checked into it was the GIC RESP. They said i could maybe transfer the grant amounts over when they arrived but they were not sure if there were fees etc. Their level of knowledge was underwhelming. 

I ended doing an Investor's Group RESP because they were the only people who would answer my questions and had at least mutual funds I could put it in. Self directed for me would have cost me too much because I would have lost too much grant money. They applied for all the grants and so far I am happy with them. I also can check my account online and I am up 10% so far.


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## Maltese (Apr 22, 2009)

Berubeland,

Thanks for the reminder that the contribution rules have changed since I set up an RESP for my daughter when RESPs were first introduced. It's a relief to know that I don't have to act before December 31 and have time to figure out the details.


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## ssimps (Dec 8, 2009)

HaroldCrump said:


> TD bank account is not needed for eSeries account.
> You will however get a TD Bank Card, which will be your online login account number.
> You don't need to open a retail banking account just to get eSeries.


So you don't need to get an account to get a card? This is good to know and I will go back to my local branch to get one (maybe I should just call TD instead?). When I went about a year ago they told me I need to open an account and could then apply to get access to the eSeries funds. I didn't want yet another bank account, so I left. 

Frankly, though, they seemed to know little about the eSeries at all. The account rep. I was given had to look on their own public website to find out what I was talking about when I said I wanted to get access to eSeries and how do I do it! So it is not surprising that me needing an account was also incorrect.

Thanks for the help.


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## HaroldCrump (Jun 10, 2009)

ssimps said:


> So you don't need to get an account to get a card?


Nope, you don't need an account.
But if you ever were to open one, it would be attached to the same card.


> This is good to know and I will go back to my local branch to get one (maybe I should just call TD instead?). When I went about a year ago they told me I need to open an account and could then apply to get access tothe eSeries funds. I didn't want yet another bank account, so I left.


You can't go to a branch and open eSeries account - that's the whole point of web accounts.
You "open" the account online and then mail them proof of identity, like driver's license, address proof, etc.
You will receive all account documents by post including your access card.
At no point will any branch be involved in the process.


> Frankly, though, they seemed to know little about the eSeries at all. The account rep. I was given had to look on their own public website to find out what I was talking about when I said I wanted to get access to eSeries and how do I do it! So it is not surprising that me needing an account was also incorrect.


It's not surprising that they won't know about eSeries.
Even if they did, they won't be very helpful.
The purpose is to have a "self-service" account, which means less work for them and thus lower fees for you.


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## cannon_fodder (Apr 3, 2009)

larry macdonald said:


> I'm doing some research into how people invest for their children's post-secondary education. It seems TD e-Series index funds within an RESP are a popular choice. Anyone doing it differently? What about other options outside an RESP like universal life insurance policy, group scholarship plans, pay off debt now to free up cash flow during university years, in-trust accounts, CTB/UCCB invested in account, monthly income funds, tax-advantaged mutal funds, TFSA, age 40 trust etc. Is anyone using them instead or as supplements?


For the most part I had it in BMOs Canadian dividend fund. But this year I got ultraggressive and one might say lucky. 

When the market sunk low in March I was confident that the TSX would arise like a Phoenix from the ashes. So I cashed in and bought HXU the Betapro ETF that is leveraged 2x the daily movement. When I felt that the market was moving sideways I sold it after a 78% gain. Then I moved to HND and HNU which are the same idea except they deal with Natural Gas. Wasn't very successful until the last 30 days. I just capped off another big gain. After all is said and done I more than doubled my daughters RESP from the beginning of the year. 

Now I will buy some dividend yielding stocks since the balance is high enough to hold a few.


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## ssimps (Dec 8, 2009)

cannon_fodder said:


> But this year I got ultraggressive and one might say lucky. When the market sunk low in March I was confident that the TSX would arise like a Phoenix from the ashes. So I cashed in and bought HXU the Betapro ETF that is leveraged 2x the daily movement. When I felt that the market was moving sideways I sold it after a 78% gain. Then I moved to HND and HNU which are the same idea except they deal with Natural Gas. Wasn't very successful until the last 30 days. I just capped off another big gain. After all is said and done I more than doubled my daughters RESP from the beginning of the year.
> 
> Now I will buy some dividend yielding stocks since the balance is high enough to hold a few.


I wish I had your luck when I felt like gambling.


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## HaroldCrump (Jun 10, 2009)

I am not able to get specific details about the additional CESG grant that is available for RESP account based on family income.
How much is the additional CESG per year?
Is it still part of the $7,200 max grant or is this over and above that?
The canlearn site is not very clear about the exact amount of the additional CESG grant.


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## Four Pillars (Apr 5, 2009)

HaroldCrump said:


> I am not able to get specific details about the additional CESG grant that is available for RESP account based on family income.
> How much is the additional CESG per year?
> Is it still part of the $7,200 max grant or is this over and above that?
> The canlearn site is not very clear about the exact amount of the additional CESG grant.


Harold, the basic RESP grant is 20% of contributions up to $500 per year.

All the extra grants are based on net family income - not sure if these numbers are completely up to date.

If net family income is greater than $77,664 then they only qualify for basic 20% grant.

If net family income is between $38,832 and $77,664 then can get 10% extra grant on the first $500 of resp contribution (ie a max of $50 grant per year).

If net family income is less than $38,832 they can get 20% extra grant on the first $500 of resp contribution.

The extra grants are included when calculating the $7200 lifetime limit. 

Canada learning bond is available if the primary caregiver is receiving the national child benefit supplement.


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## HaroldCrump (Jun 10, 2009)

Thanks, FP for the details.


> The extra grants are included when calculating the $7200 lifetime limit.


So those with income less than $77,664 are not really getting extra grants, are they?
They are simply getting the $7,200 max grant sooner than others.
In other words, by getting the extra CESG grants, they'll reach the $7,200 limit faster than others, but not get anything more - correct?


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## Berubeland (Sep 6, 2009)

These are the government websites and yes Harold it is true the low income people just get their grant faster. 

Ask around even high income people and I'm sure you'll find that the minority even contribute to a RESP

The Canada Learning Bond is free and I am the only low income person I know who is even bothering to get it.


http://www.canlearn.ca/eng/saving/cesg/index.shtml

http://www.canlearn.ca/eng/saving/clb/index.shtml


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## Four Pillars (Apr 5, 2009)

HaroldCrump said:


> Thanks, FP for the details.
> 
> So those with income less than $77,664 are not really getting extra grants, are they?
> They are simply getting the $7,200 max grant sooner than others.
> In other words, by getting the extra CESG grants, they'll reach the $7,200 limit faster than others, but not get anything more - correct?


That's correct - low income people can only get the same amount of grants as high income people (as Berubeland said).

It's still a bonus, albeit fairly limited. If I make a contribution of $1000 then I get a $200 grant. If a very low income person makes the same $1000 contribution then they can get a $300 grant which is more.

They are getting extra grants but in the situation where they reach the maximum grants then no, at that point they aren't getting extra grants. But they need to contribute a bit less to reach the $7200 max.


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