Posted on: 17-08-08 21:44:42
Aditya,
I am sorry but your research is missing something.
1) Enrolment fee you are talking about is associated with scholorship plans only. Like CET, USC, heritage, CEFI. They are also know as group plans.
2) There is no such thing in individual/Family plans offered through banks/insurance company. In these plans you can transfer growth to RRSP incase your child does not go to school or if goes only for two years.
Remember CRA rules applies equally to all companies but it is just plans that differ.
There is nothing negative about RESP's whatsoever. You could be on drivers seat if you chose self directed RESP. In any case you are bound to get gov grant.
Feel free to have open discussion on this forum.
What happens if child migrates to another country?
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Quote:
Originally posted by cool girl
What happens if child migrates to another country?
What do you mean by migrating? If I understood correctly, you meant to ask if child wants to have education somewhere else let’s say India, USA etc.
If this is want wanted to know then the answer is ‘money can still be used for his education’. Again in the link I provided before has a list of institutions that are approved by Gov of Canada. It’s a big document and has institution from all over the world. This is a living document and changes regularly.
If your choice of institution is not there, HRDC recommends calling them to see if you can quality for EAP.
Uhhhh...too much information to read and too tough terms to understand...and then while I was trying to read I realised it is frm 2006 and onwards so things might have changed in 5 years.....
If one wants to do RESP now, are group plans ok to invest in ? Is Global the best option in group plans ? We r not keen on MF as we are not the kinds who can track market and shuffle our funds periodically...we r "once done and forget and move on" kind....
Thanks.
Unlike insurance, I wanted to avoid contributing, due to obvious reasons but 5 years of my association with RESP and Life insurance has made me clear of many important parameters, which I think I should unselfishly put forward.
Aashu, I wish I can very bluntly and loudly say that, which are the best options available. But let me list out few important factors, which would help you to decide.
There are different options to buy RESP, such as scholarship plans, Mutual fund companies, Banks, Insurance company plans, even directly traded accounts from etrade canada etc.
All RESPs are designed to give money for the educational cost of our kids. They all have many fine prints and by and large it has many internal factors, which may put many parents in to unexpected nightmares/troubles.
Three most important phases to evaluate, while buying an RESP. ENTRY, MIDDLE JOURNEY AND EXIT. Its very important for you to evaluate that how far the RESP you chose is providing flexibility and control on these 3 factors. Let's take one by one,
@ ENTRY : Your RESP should be such that it invests majority of your money and not take any upfront charges. Your money should be invested from the word "go". All the above options charge for their service and managing your money for a long period but the option which gives you NO HEAVY UPFRONT LOAD on your investment is best. Majority of your money should start making money or atleast get invested from the first year.
@ MIDDLE JOURNEY : All the RESPs have surrender charges. When we break an agreement, there is always a charge for the same. However, evaluate the option, which has the most least of the same.
@ EXIT : According to me, this is the most purposed and crucial phase. YOU MUST HAVE CONTROL on your matured amount, when your child is ready for education. It should not happen that you are pleading to the comapnies for getting your own matured amount if your child opts for various flexibilities. Thousands of parents have faced this at the exit. You should be the true BOSS of your own money, when you complete the desciplined journey of so many years. It should not happen that your matured amount is given to you in pieces.
Remember, RESP is a feel factor and it should be a decision of your HEART and not your MIND. I always tell this to my clients so many times. You would have always saved even if there was no RESP in Canada. Its a TIME SPECIFIC journey and hence do not mix that with other speculative investment decisions, where we are not worried about a time specific GOAL. Govt of Canada gives you money to buy it (CCTB and UCCB), on top of it it also gives you 20 % or even a bit more in the form of CESG (Grant). Add 5 to 6 % and you should be happy. There are some good options, which also rewards you towards loyalty, which becomes icing on cake or help supplment the fees and charges.
PM me with your number and I would help you for sure. My role is to educate people, who are genuine buyers and not MYSTERY SHOPPERS. Even if you don't enroll from me, I would be satisfied with what I do.
Regards,
VJ.
Quote:A few minor things have changed in last 5 years.
Originally posted by Aashu
Uhhhh...too much information to read and too tough terms to understand...and then while I was trying to read I realised it is frm 2006 and onwards so things might have changed in 5 years.....
There is no yearly contribution limit any more, just a lifetime maximum ($50,000).
The minimum CESG grant was increased as well effective from 2005 or 2006.
List of institutions eligible for additional CESG and CLB has changed slightly.
But by and large the basic principles remain the same.
Quote:If you like passive or "hands-off" investing, you don't necessarily need to go with mutual funds or group plans.
If one wants to do RESP now, are group plans ok to invest in ? Is Global the best option in group plans ? We r not keen on MF as we are not the kinds who can track market and shuffle our funds periodically...we r "once done and forget and move on" kind....
In fact, group plans and other plans that have large fees are a big drag on returns.
There will be fees no matter how you invest, but your goals should be (1) clearly understand the exact fees involved, esp. hidden fees and (2) minimize the fees.
In general, if you are paying more than 1% in overhead (fees, trading costs, commissions, etc.) then you are probably paying too much, esp. if you return is in the 5% to 7% range.
Do not sign up with group plans unless you have first investigated all other options.
I am yet to see a compelling or convincing argument for pooled/group plans.
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