Posted on: 17-03-09 11:06:41
I am already late in getting RESP for children
At present doing shopping for RESP
Is there any difference if I take RESP from bank or from Private company?
I recently meet one sales rep who worked on commission basis with private company
The picture I got is - bank charging too much money on fees etc etc...
So always go with private company
Of course this private company is not working FREE
They have various fees in the name of Membership fee, adm fee etc etc.
Here are various fees coming in picture -
Membership fee - $100 per unit ( unit depends on age of child & amount )
Adm fee- 0.55 % per year times 18
Adm fee for canada edu saving grant - 0.55 % per year times 18
Depository fees- $150 one time
Out of this
Only membership fees will be refunded after age 18 when child go to university
Sales rep says bank too charges almost similar way but different names like
Management Expense Ratio ( MER ) on contributions as well on Canada edu savings grant
Just wanted to confirm what is correct ?
I heard about various private companies like Children education fund, Heritage education funds etc etc...
Of course I will be visiting soon bank also to take more information
Thanks
Quote:That is, quite obviously, a biased opinion and not quite correct either.
Originally posted by mumdxbcan
Is there any difference if I take RESP from bank or from Private company?
I recently meet one sales rep who worked on commission basis with private company
The picture I got is - bank charging too much money on fees etc etc...
So always go with private company
Private brokers such as this one work on commission basis and it is in their interest to convince you to open RESP/RRSP with them rather than a self-driven account, no offense to anyone intended.
Quote:Yeah, this is pretty standard.
Here are various fees coming in picture -
Membership fee - $100 per unit ( unit depends on age of child & amount )
Adm fee- 0.55 % per year times 18
Adm fee for canada edu saving grant - 0.55 % per year times 18
Depository fees- $150 one time
Quote:Not true at all.
Sales rep says bank too charges almost similar way but different names like
Management Expense Ratio ( MER ) on contributions as well on Canada edu savings grant
He/she is misleading you.
MER is simply the fees charged by mutual funds.
If MER bothers you, don't invest using mutual funds.
Also, MER is not necessarily a bad thing.
There is no free lunch in this world, obviously.
If you invest directly in stocks or bonds, you pay brokerage commissions.
If you invest in a private fund, you pay all these hidden fees and you have no guaranteed return.
If you invest in mutual funds, you pay MER.
While an excessively high MER (like 2.5% or above) may be a red plag, very good mutual funds have reasonable MERs in the range 1% - 2%.
You can also go for index funds (like TD eFunds) and/or ETFs, which have very low MER (0.5% or less).
Quote:Yeah, these are the private funds.
I heard about various private companies like Children education fund, Heritage education funds etc etc...
Most of them are tontine schemes, with extended locked in periods, no possibility for bail outs, no guaranteed returns, etc.
This is obviously my opinion only and others may disagree - but I would stay away from these tontine schemes.
Me, I like simplicity and transparency.
I like to know exactly what fees I am paying and what I am getting for it.
I like to know what type of investments my money is being invested in.
I like to know what my rate of return is and be able to project how much RESP will be worth after X number of years.
To that end, the simplest approach is to open a self-driven RESP account with a discount brokerage like E-Trade (now Scotia I-Trade) or TD.
Second best option is a bank-based RESP investing primarily in GICs and mutual funds offered by the bank (Scotia, BMO, RY, etc.)
Third comes holding all the money in cash (which may not be a bad thing these days).
Distant fourth are these private funds.
All IMHO, of course.
-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
Thanks Pratickm for valuable info
So in short he/she was just giving UNTRUE picture about RESP from bank
If I really want to save so many different fees
I should just open bank based RESP which is investing primarily in GIC etc
If I don't invest those money in mutual funds, naturally MER & other things will not come into picture
Just wondering if anyone has open RESP with such tontine schemes like Children education fund, Heritage education funds etc etc.
How is your experience in service, fees etc.
Thanks
Quote:I would say yes it is a biased opinion.
Originally posted by mumdxbcan
So in short he/she was just giving UNTRUE picture about RESP from bank
There are many ways to spin these things around.
Bottom line is that nothing is free - whichever option you pick, you have to pay for investment.
If you keep it all in cash, even that's not free - you "pay" by way of inflation.
Quote:That would save on the fees, yes, however that may or may not be the best option for you.
If I really want to save so many different fees
I should just open bank based RESP which is investing primarily in GIC etc
GIC rates these days are so low that's it's not even funny.
But if you are very risk averse and want to stay away from fees of any kind, then GICs are your best option.
Also, you mentioned that you are starting RESP late - how late?
If your kids are only a few years away from college/university, then again term deposit/GIC is probably your best option.
Quote:Correct
If I don't invest those money in mutual funds, naturally MER & other things will not come into picture
-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
If any one has done any thing in detail such as opening a TRUST account as RESP and managed the same by themselves, by-passing the current expenses and the fees incurred, either through a Bank or a Trust or handled the same through a broker?
Any help or comments in this will be highly appreciated.
Thank you in advance.
Freddie.
I am looking to open RESP account ofr kids, Could somebody please share experience with USCF, CST and Bank.
Thanks
-----------------------------------------------------------------
Saloni
Whenever you avail any service ( s) from banks you will find that their charges are always higher thn financial companies and normally your investment will not do that good either, thats my personal experiance.
I would suggest you to go with a company only deals with RESPs, do some research before you decide and DO NOT take any Decision under Sales rep. pressure and always reconfirm the claim made by Sales Rep. from other sources .
RESP was my first investment in Canada almost 14 years ago and am happy with the performance of my funds ( of course I did not invest with the Bank)
(Just as a side note .. don't get confused with my ID it does not mean Registerd Education Savings Plan... it's short form of Respiratory
)
-----------------------------------------------------------------
Dont help others because others have helped you,,,,help others because its the right thing to do!!!
http://www.indopia.in/
