RESP account for my kid

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surtalme
Member since: Nov 04

Posts: 82
Location: ontario
Post ID: #PID

Posted on: 20-11-07 21:41:49

I'm looking to open a RESP account for my kid. However I don't like paying enrolment fee/ penalties etc. What are my options?

rajcanada
Member since: Jul 03

Posts: 2713
Location: Kitchener, ON
Post ID: #PID

Posted on: 21-11-07 06:41:57

One option would be open RESP account with your bank. Second option would be to contact an agent who can enroll you in self-directed RESPs (Trimark mutual funds, etc.).

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dp_jain
Member since: Jan 04

Posts: 418
Location: Brampton
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Posted on: 21-11-07 07:22:36

If you do not want to pay any enrolment fee/ penalties etc then you have only option to conatct any of the bank or any financial advisor who deals in mutual funds so that you can set up a RESP account. Some insurance companies also provide RESP facility with some additional benefits.

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surtalme
Member since: Nov 04

Posts: 82
Location: ontario
Post ID: #PID

Posted on: 21-11-07 07:57:41

Thanks rajcanada and dp_jain saheb.

If I open a self directed RESP account with a bank or any other FI, are there any rules that I have to invest in Fixed Income instruments such as GICs etc or can I also invest in securities of my choice? I am not too keen on Mutual Funds.

investpro
Member since: Nov 06

Posts: 1628
Location: carl sagan's universe
Post ID: #PID

Posted on: 21-11-07 10:44:36

Hi Surtalme,
If you really want a steadily growing RESP w/o paying enrollment fees, there are scholarship programs out there that do not charge enrollment fees.

These programs typically give a steady 5-6% rate of return.And if you miss a payment or two or three or many , there is no penalty, nor any pressure to catch up on missed payments.

If you put the money in mutual funds, please be prepared for ups and downs unless you put them in money market funds and even there as recently shown due the subprime crisis there are up and downs but much too slight to lose any sleep over.

For mutual funds there might be a 15-20 percent increase or decrease even, unless you put them in balanced funds where there will be a 8-10 percent increase or decrease.

In specialty funds there might be 100% increase or decrease.

Also depending on how old your child is, you should choose between MFs or other safe investment vehicles. If your child is 1-8 years, I recommend mutual funds, if over that, best to go for more conservative returns.
Again depends on your risk tolerance- I am giving a general viewpoint.
Email or pm me for further info.

surtalme
Member since: Nov 04

Posts: 82
Location: ontario
Post ID: #PID

Posted on: 21-11-07 20:03:14

Hi Investpro, my child is 8 and I want to open RESP account to save and avail of government topups. What's your email address?

reachash
Member since: Dec 03

Posts: 397
Location: Mississauga
Post ID: #PID

Posted on: 21-11-07 22:09:40

There are many aspects to opening an resp accts, like,

1. Age of your child
2. Your family income
3. When did you and your child become PR of Canada
4. How to maximise the lifetime grant of $7200
5. What points to consider while withdrawing from RESP plan
6. How to minimise tax payable in the hands of the beneficiary
7. How to catch up on the grant that one didn't avail of, if any

With due respect to everyone, I would strongly suggest you to call your banker. That person would be able to give you the best unbiased advise.

All the best.

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Contributors: investpro(6) reachash(6) surtalme(5) Val(2) sudesingh(2) dp_jain(1) HelloG(1) DP_gta(1) freakoutguy(1) ujpal(1) rajcanada(1)

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