Posted on: 26-11-07 23:04:14
Can anyone tell me what are the usual returns when you start your RESP with a trust where the money is pooled? I heard the money is usually invested in bonds, moneymarket and GIC so I guess in this market it shouldn't be more than 4-5%.
Also, Is it true that if you miss a payment when enrolled in trust, you might end up paying some penalty?
In that case why most of the people go with education trust and not the banks?
Quote:
Originally posted by ujpal
Can anyone tell me what are the usual returns when you start your RESP with a trust where the money is pooled? I heard the money is usually invested in bonds, moneymarket and GIC so I guess in this market it shouldn't be more than 4-5%.
Also, Is it true that if you miss a payment when enrolled in trust, you might end up paying some penalty?
In that case why most of the people go with education trust and not the banks?
Can someoone answer the above question please.Why should people go with education trust.?
I am in a similar situation, I have a RESP from Global and very surprised to know about the penalty/missed payment clause. I have the following issues.
What if I want to go back to India. I can understand the fact that I will not be getting the govt contribution, but why am I being forced to continue to pay the contribution. secondly the returns which I get is around 5-6%, which in my openion anybody can get with little knowledge. Finally if I really move out of Canada, with all the fees which is around 3600 cad, my net returns will be negative. Am I missing something somewhere?
Quote:
Originally posted by investpro
Quote:
Originally posted by reachash
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.
Do you work for a bank?
Tons of advisors would give you unbiased opinions.
By the way is there such a thing as being unbiased?
Qui sait?
Yes I do work with bank.
I let my customer decide where they want to invest. Even if they choose to go to other bank, I am happy for them, as long as they are not going to private scholarship trusts. That's what I mean by being UNBIASED. But again all bankers may not be same like all private advisors. So I wouldn't want to generalise my opinion. I would like to rephrase my earlier sentence. Please check all availabale options, before you make your decision.
Hope this helps.
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Quote:
Originally posted by surtalme
Quote:
Originally posted by freakoutguy
I personally prefer a self directed RESP, which gives you the flexibility of payments and allows you to maintain a mix of securities (stocks, GICs, Mutual funds etc) in keeping with the market conditions. The account maintainence fees are nominal and can be waived if you have other investment accounts with the same provider.
Needless to say, you need to have some experience as an investor, if you want to go the self-directed route.
Good points. Do you know how much banks charge as maintainence fees for self directed accounts?
There are some banks, who charge for opening and maintaning RESP acct. But all banks do not charge such fees. IMHO, buyers beware. Be a smart buyer, do your research and save whatever money you can, as long as you are getting proper advise.
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Quote:
Originally posted by surtalme
What is maximum amount of Canada education saving grant that can be claimed in one year assuming unused grant room is available from previous years? I read somewhere it is $1000 (Assuming you contribute $5000).
1. Lifetime maximum allowed is $7200 per beneficiary
2. Yearly maximum amt is $500 per beneficiary
3. But as you mentioned, if the subscriber and the child became resident of Canada ( not neccessarily PR, even persons with SIN starting with 9 can apply) few years before starting RESP plan, then one can invest yearly amt of $5000/= to maximise grant, and get a grant of $1000, per beneficiary, as long as it does not go over lifetime max of $7200/=
Hope this helps.
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Quote:
Originally posted by ujpal
Can anyone tell me what are the usual returns when you start your RESP with a trust where the money is pooled? I heard the money is usually invested in bonds, moneymarket and GIC so I guess in this market it shouldn't be more than 4-5%.
Also, Is it true that if you miss a payment when enrolled in trust, you might end up paying some penalty?
In that case why most of the people go with education trust and not the banks?
1. I do not know what are the usual returns for trusts. To be very honest, as a licenced M Fund salesperson, nobody can guarantee any returns.
2. I have had few of my cusotmers complain abt scholarshipt trsuts fees and penalty and fine prints.
3. I believe, most people go thru the scholarship trust becoz of lack of knowledge and in many cases it is the agents from your own community who solicits biz and you end up trusting that person.
IMHO, please check with you own bank. You will probably end up with much better RESP acct.
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Let's help each other to grow & prosper in Canada
Quote:
Originally posted by Val
Quote:
Originally posted by ujpal
Can anyone tell me what are the usual returns when you start your RESP with a trust where the money is pooled? I heard the money is usually invested in bonds, moneymarket and GIC so I guess in this market it shouldn't be more than 4-5%.
Also, Is it true that if you miss a payment when enrolled in trust, you might end up paying some penalty?
In that case why most of the people go with education trust and not the banks?
Can someoone answer the above question please.Why should people go with education trust.?
I am in a similar situation, I have a RESP from Global and very surprised to know about the penalty/missed payment clause. I have the following issues.
What if I want to go back to India. I can understand the fact that I will not be getting the govt contribution, but why am I being forced to continue to pay the contribution. secondly the returns which I get is around 5-6%, which in my openion anybody can get with little knowledge. Finally if I really move out of Canada, with all the fees which is around 3600 cad, my net returns will be negative. Am I missing something somewhere?
I feel sorry for you. Please don't get me wrong. But you trusted someone (may be your own friend or relative) and opened resp with this company. I have many of my customers complain abt their penalty clauses. The original fees that they charge are unheard of. What you are missing NOW is the fact that you didn't check all the fine prints at the time of signing up for this acct.
But I have a way out for you. What you can do is continue making the minimum reqd contribution of approx $25/= per month (pl correct me, if I am wrong) to avoid any penalty and also contact your banker, who knows you and understands you and your needs very well. Open another resp acct and contribute rest of the portion there. As far as I know, none of the banks would penalise you for either stopping the contributions or clsoing the plan. And most of all there are no intial fees at all. At the most, yearly fees which is negligible amt. Again these annual fees are not charged by all banks.
If you choose to invest in M Funds, you may have to pay MER, but that is deducted from your profits and you don't have to shell it out from your pocket in excess of the contribution amt.
Another point that you may want to keep in mind is that even if you choose to move out of Canada, you can stop your contribution but you don't have to collapse the plan. It can grow till your child goes to college or university and at that point of time, you can redeem the money without having to loose any grant.
All the best.
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