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Email this10:49 am
September 22, 2017
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I love the comparison chart on the site, but wish it encompasses a little more. In particular resp. My children have RESPs and am wondering what people are getting for rates?
Thanks Ken
4:06 pm
May 22, 2015
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Good idea. I'd love to see that one too. The problem is that only few banks offer RESPs.
In our case, we're investing it in ETFs and GICs at BMO.
4:40 pm
January 3, 2013
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We use Questrade and ETFs based on Couch Potato recommendations.
6:02 pm
September 22, 2017
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Thanks guys, but with the markets entering year 10 of the bull run, becoming the longest bull run in history in August. And with the looming trade war on the horizon, I'm looking for short term investments. Savings accounts or short term 1 year gics.
9:23 am
January 3, 2013
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tcharger67 said
Thanks guys, but with the markets entering year 10 of the bull run, becoming the longest bull run in history in August. And with the looming trade war on the horizon, I'm looking for short term investments. Savings accounts or short term 1 year gics.
If you think we will be entering a bear market, why not a longer GIC without exceeding the insurance? I would do short 1 year if I am certain the interest will go up which obviously they won't move for at least 1 year. I now using the suggested strategy here and putting money in different GICs. 5 years, 3 years, 2 years, 18 months, 1 year.
3:42 pm
September 22, 2017
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because save 2 retire in 2009 i made 41.21% return on my index funds. infact the only year that i never made double digits in simple vanguard, and e-series funds was 2011.
Im an index guy, always will be
I would appreciate advice regarding resp rates from other members as far as whom carries gics and what rates they are receiving
5:57 pm
December 12, 2009
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I, too, share your concern for the long bull market. I'd like to get a total market correction of 40% to invest my significant cash holdings on the sidelines, but I think I'd be happy with a 20% correction and we're half way there. As long as you don't buy in at the "tops," buying in at some point where it reverts to the mean, I imagine, significantly improves your long-term capital growth.
Yesterday actually, I learned Vanguard Canada has launched three ETF portfolios in a single ticker, conservative, balanced, and growth, with an effective of MER of ~0.22%. That significant beats Tangerine's and Simplii Financial's CIBC index-based mutual funds, most robo-advisors, and may even beat TD's e-Series index-based mutual funds (which are only available through TDCT branches or TD Direct Investing). You're limited in their strategic asset allocation and the timing of their rebalancing, which is "several times per year," and there may be some implications for non-registered accounts. However, for RRSPs, RESPs, and to a certain extent, TFSAs, I think it'd be a great tool. If you added funds once a month, that's $120 per year in commissions plus ~$120 in effective fund MER (assuming $50,000 invested) for a total of $240 (again, assuming $50,000 invested), half what a robo-advisor or TD e-Series is and three quarters less than Tangerine/Simplii. Something to think about:
In the meantime, what I'm doing is holding my currently invested cash in my registered accounts in Scotia iTRADE, paying around 1% (unless it's gone up to 1.25% net of the trailer fee) in a broker-held, nominee form BNS Investment Savings Account (CDIC insured). You might also consider the Horizons Active Floating Rate Bond ETF (TSX: HFR)...John Hood of J.C. Investment Counsel uses it quite a bit because it's highly liquid and the Horizons managers are very good about maintaining a constant Net Asset Value of about $10.00, plus or minus 5 cents. Comfortably pays 2% per annum, compounded and paid monthly. HPR (the Active Preferred Share ETF, also from Horizons) is less liquid and more volatile to sudden interest rate changes by the BoC, but it's a pretty good choice depending on your time horizon and yields a bit more.
Hope that helps! 🙂
Cheers,
Doug
2:34 am
December 12, 2015
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Ken, We joined CST Foundation for RESPs 20 years ago, and they invested conservatively so gave a limited return, better than GIC rates, but I enjoyed not having to do anything but send a yearly cheque.
2:49 am
December 12, 2009
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Saver-Mom said
Ken, We joined CST Foundation for RESPs 20 years ago, and they invested conservatively so gave a limited return, better than GIC rates, but I enjoyed not having to do anything but send a yearly cheque.
They're a dominant RESP sponsor for sure, namely because many FIs still don't offer non-mutual fund and non-self-directed discount brokerage account RESPs (*cough* HSBC *cough*). Their costs are typically high, which lands them in criticism by some. I'm not as quick to lob that criticism. Saving for children's education is great and the government grants are, in effect and if used, free money.
Thanks for sharing your story, SaverMom! 🙂
Cheers,
Doug
3:12 am
December 12, 2015
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Doug, My only criticism of CST are 1) that they give out the yearly allocation in two parts, at the beginning and at the end of the school year, which is confusing 2) it seems impossible to know your real return (they make predictions of scenarios predicting returns but I don’t think they notify you of what you actually got) 3) you are locked in to continuing with them or will lose a lot of money, which may be a problem for people whose income drops significantly and who cannot make the yearly payment. On the upside, safe investing, they do the paperwork to get the grants, easy peasy.
4:29 am
October 21, 2013
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There was another thread a year or three ago, which went into the RESP offerings in some detail, including the plans offered by the organizations that are not banks. One person had a horror story about the latter, as I recall. Those interested may want to search out previous comments.
6:37 am
September 11, 2013
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Getting back to best rates, one option is to pick whatever fi offers RESPs and also consistently offers near-best RESP GIC rates and just go with them.
You can have as many RESPs as you want, so an (a bit unusual) option is to open one every year when you contribute wherever the rate is best, assuming you contribute enough to meet their minimum amount for a GIC. It's a mess for record keeping and also at maturity time there's no guarantee they'll still have good rates, but it is an option. Check out transfer and close-out fees first.
Another option is to go with a discount broker and whenever you contribute go with their best GIC rate offered. Also allows you to get into non-GIC investments if you ever get the urge. Check out account fees first.
12:08 pm
December 12, 2009
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Loonie said
There was another thread a year or three ago, which went into the RESP offerings in some detail, including the plans offered by the organizations that are not banks. One person had a horror story about the latter, as I recall. Those interested may want to search out previous comments.
Yes, I, too, have heard such "horror stories," but I have also heard some pretty bad stories about all kinds of registered plans from the major banks - especially HSBC (where I have first-hand knowledge). (HSBC's issue is how they handle safe deposit boxes and joint accounts, mind you, less so for registered plans.) Perhaps that's instructive on why relying on experiences on these forums is often not helpful? 😉
CST would personally not be my choice, based on the penalties for early withdrawal. However, I'm willing to keep an open mind. If they offer GICs in addition to mutual funds, they already rank ahead of HSBC, which only offers mutual funds that, in my view, are tantamount to being extremely high cost "closet indexing" actively managed funds that merely mimic lower cost index funds, which HSBC doesn't offer.
Cheers,
Doug
12:40 pm
October 21, 2013
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If it were me, I would not go with opening a new GIC every year, wherever the rate was best.
Generally, I am not opposed to hopping around if you have the mental agility, but in this case, where we are dealing with relatively small amounts of money per each, but you are looking at an investment that will in the end run pehaps 20 years and a lot can change interms of FIs buying each other up, paying havoc with your Excel sheets. My bigger concern is that they could all introduce fees or higher fees for withdrawals during that period, and you'd be stuck paying way too much money. Some of myu RSP FIs increased their fees 400% during the years I was with them. As far as I know, there is nothing preventing them doing this in the middle of a GIC term, unless RESPs are different in this respect from other registered plans.
11:22 am
December 12, 2009
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Loonie said
If it were me, I would not go with opening a new GIC every year, wherever the rate was best.
Generally, I am not opposed to hopping around if you have the mental agility, but in this case, where we are dealing with relatively small amounts of money per each, but you are looking at an investment that will in the end run pehaps 20 years and a lot can change interms of FIs buying each other up, paying havoc with your Excel sheets. My bigger concern is that they could all introduce fees or higher fees for withdrawals during that period, and you'd be stuck paying way too much money. Some of myu RSP FIs increased their fees 400% during the years I was with them. As far as I know, there is nothing preventing them doing this in the middle of a GIC term, unless RESPs are different in this respect from other registered plans.
You track your GIC maturities in an Excel spreadsheet? Wow, that must be some some spreadsheet. I've love to see a "stripped down" (i.e., without any account number column and other personally-identifiable information) version.
Cheers,
Doug
2:08 pm
October 21, 2013
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Actually, I don't, Doug; but I understand that other people do! I am so old-fashioned and corny, you won't be able to stand it! I have everything on paper and don't use computer for any personal finances. I do use a calculator.
Sorry to disappoint.
But I think annual GICs would be a nuisance to track, no matter how you did it, with RESPs esp if more than one child. It could be done though.
4:34 pm
December 12, 2009
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Wow, considering how much you use the computer, I'm surprised you've not made good use of advanced Excel spreadsheets to simplify your calculations. I suppose you don't do online banking, either, like my grandma, even though when she was a Senior Investment Specialist on the CIBC Imperial Service branch team in Prince Albert, she regularly used and encouraged her clients to use online banking. 😉
Cheers,
Doug
4:43 pm
October 21, 2013
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I do online banking only where there is no alternative.
If there's going to be a breach, I want it to be clear that it's at their end.
There are other reasons too, which are probably more significant, but I'm not going to get into them.
4:51 pm
December 12, 2009
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Loonie said
I do online banking only where there is no alternative.
If there's going to be a breach, I want it to be clear that it's at their end.
There are other reasons too, which are probably more significant, but I'm not going to get into them.
Awww...I'm always curious to hear peoples' reasons. 🙁
Cheers,
Doug
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