Location: carl sagan's universe
Posted on: 29-11-07 10:04:49
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?
Hi Val,
Sorry to hear of your predicament. Actually Global has 2 options- one that has enrollment fees and the other that does not.
The one that has enrollment fees, if you miss a payment and do not make it up you will lose the proportionate amount of enrollment fees.
Option 2 is where you pay as you go. No enrollment fees. If you miss a payment, no need to catch up, no enrollment fees to lose
If your agent did not explain these two options, that's damn sad.
The whole deal is too lengthy to write, so I just gave it to you in a nutshell.
One option with enrollment fees and the other without.
Both banks and financial advisors (as opposed to RESP agents) will give you the best options.
Read reachash's replies. he has some good points though I do not agree with his emphasis on banks being the best bet.
One of his phrases (paraphrased here) is to look around and choose what you believe to be the best option.
Ask your Global agent what happens if you change the plan to a paid up plan.
Then call the customer service centre to verify your agent's response.
Always good to re-confirm stuff.
To give another viewpoint to reachash's points, I have just too many clients who gripe about the service from the banks and have instead switched to financial advisors. I also know of others, who are not my clients, who have done the same.
There are always 2 sides to the story.
Enjoy!
Thanks reaches and investpro for your inputs.
I spoked to the call center today and they told me since I have only completed 15% of the agreement I will have to forfeit 85 % of the enrolement fees approx 3500 cad if I terminate.
If I reduce the payment then also I will have to pay some penalty.
As much as I hate this rigidity, I have decided to continue with the scheme.
Bottom line is unless you are sure of being in this country, unless you are sure you can make the contribution, it's simply stupid to get into these kind of things for a net return of around 5-6%.
Location: carl sagan's universe
Posted on: 30-11-07 09:46:18
Quote:
Originally posted by Val
Bottom line is unless you are sure of being in this country, unless you are sure you can make the contribution, it's simply stupid to get into these kind of things for a net return of around 5-6%.
Totally agree.
However even if you stay in the country why get yourself entangled in enrollment fees?
However there are a few who opt for that for discipline purposes- best to speak to them on this.
There are also those who for discipline purposes actually opt for exit-load mutual funds for their RRSP strategy.That way even if they are in a bind, they will look for other ways of getting money rather than draw on their RRSPs as there will be a double dose of charges- one the tax withholding and the other the exit-load.
All types. (Dull and insipid truism if I do say so myself).
Its an old thread but lots of useful information is available here from Investment Gurus. I wish i read this thread earlier.
Investpro and reachash can you guys please give some inputs about 'Heritage education fund'.
My husband has already invested in this and we made a mistake of not researching enough .Is this RESP investment OK? Also while filing Tax returns do we take into account this investment?
Location: carl sagan's universe
Posted on: 30-03-08 07:18:56
Hello HelloG,
Heritage, like most other trust plan, is a good plan only if you are disciplined enough to keep on making the monthly payments sans missing any, o/w you might end up losing the enrollment fees.
There might even be catch up clauses, i.e. if you miss so many payments, you have to catch up on all missed payments.
In the uncertain environment of work and the economy, I usually tell my clients to opt for a more flexible plan.
Maybe you should ask your agent the attrition rate. Anyway, if you've already signed up, unworry, tons of people are enrolled in it.Also perhaps you can ask the agent if you can turn it to a paid up plan at any time.
Don't mean to scare you, just giving you the lowdown.
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.
Ha ha what a laugh "bank unbaised neutral opinion", call the cat to mind the rats. It far better to go self RESP with a good advisor. From the current trend go balanced or money market or even the new Dynamic Edge, or something fixed income types like a T bill or bond. For me, GIC doesnot make too much sense afer accounting for inflation.
Your call
