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RESP with "Knowledge First Financial"
October 8, 2014
8:38 pm
Norman1
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I had a look at CRA: Payments from an RESP.

It looks like the cost of administering an RESP account can be higher because of the bookkeeping needed. The promoter of the RESP seems to be required to keep track of the portion of each RESP that is

  1. Subscriber contributions
  2. Canada Education Savings Grant money
  3. Canada Learning Bond money
  4. money from a Provincial Education Savings Program (Alberta, Saskatchewan, and Quebec)
  5. earnings on the money invested in the RESP

An RESP seems to have many different kinds of withdrawals/payments with rules on which portion those can come from:

  1. Tax-free refund of contributions, to beneficiary/student or subscriber/parent, which can only come from Portion #1.
  2. Taxable Educational Assistance Payments (EAPs) to the beneficiary/student, which can only come from Portions #2, #3, #4, and #5 and under certain conditions.
  3. Taxable Accumulated Income Payments (AIPs) to subscriber/parent which can only come from Portion #5 and under certain conditions.
  4. RESP payments to a designated educational institution which can only be from Portion #5.
  5. Repayments of grants which have to be made from Portions #2, #3, and #4 under certain conditions.
  6. Transfers of property between RESP's.

When it comes time to take money out of an RESP for a beneficiary student, the subscriber decides how much of the withdrawal is taxable EAP and how much is tax-free refund of contributions.

October 8, 2014
9:06 pm
Loonie
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It's good to have the details, but, surely, in this era of computerized everything, and in dealing with a company whose entire business seems to be RESPs, all of this ought to be fully automated and pretty much instantaneous. The investment, on the part of the financial institution, is in setting up the systems and maintaining them.
I think they are pleading undue complexity based on a 20th century model.

Many financial institutions don't offer RESPs, and this may explain why they don't, as it may be a strategic decision not to invest in setting up the systems. Nonetheless, a number of banks and credit unions do seem to find it worth their while.

October 8, 2014
9:16 pm
kanaka
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Perhaps the fee schedules are allowable from years ago. Still collecting and not taking into account where the processes have been streamlined and computerized. I know it is still happening in BC with doctors collecting fees based on old techniques but they are using laser, micro surgery etc., taking less time and expense.

October 16, 2014
8:46 am
Norman1
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For sure, computers and automation do help. But, someone still has to deal with the complexity. The software vendor would likely charge more for the RESP stuff.

I'm also not sure if all of the RESP details can be automated. With an RRSP withdrawal, there's no conditions on withdrawals. However, if a parent wishes to withdraw some of the RESP earnings and government grants as an EAP to the student, there are conditions that must be met.

I don't know if all the qualified post-secondary educational institutions, inside and outside of Canada, have some computerized system for the RESP promoter to verify that, for example, the student is enrolled in

an educational program at post-secondary school level, that lasts at least three consecutive weeks, and that requires a student to spend no less than 10 hours per week on courses or work in the program.

October 25, 2014
6:48 am
Save2Retire@55
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Thanks everyone. I still have doubts opening the account with them specially because of very high fees they charge. I look at it as I am loosing money before starting gaining it back. Maybe qtrade or questrade are better options for a long term saving account. I need to figure this out before the end of year.

November 5, 2014
8:04 pm
Greg Franklin
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Yas, I think that expecting anything more than 3% to 4% a year is going to entail taking more risk and fees will have to paid every year maybe 0.50% to 1.50% depending on what they are investing in.

RESP's for some reason do not seem to be easy to find financial institutions that have GIC's. The only other thing that I am aware from my adviser has shown me is government zero coupon bonds but they are not more than 3.00% to 3.65% but are 6 to 14 years longer than 5 year GIC's.

Rates are low today and it does not look good for years to come. It sucks I know but what can you do.

November 7, 2014
4:46 pm
Greg Franklin
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Yas, my son today spoke with our adviser which his adviser as well and had saved $5,000 throughout the year on a monthly basis for his 2 year old son's RESP which is our grandson to have by the time he goes to college, university or some trade school etc.

He bought today a CIBC 2031-May-15 zero coupon bond also known as residuals, strip bonds etc. It was a 3.8902% yield to maturity. He can do this because his son is quite young. It looks fairly safe as a Canadian big bank is.

He has 3.00% 5 year RESP GIC's this year 2014 from Scotia Bank worth $10,500 and a 3.00% $8,500 RESP GIC at Duca C.U. for 7 years. He has $3,600 in a 2.05% RESP savings account with Meridian Credit Union.

This is why he thought that having 18% in a safe, corporate CIBC zero coupon bond was fine as he has 82% in safer, CDIC, DICO insured GIC's.

November 8, 2016
8:23 am
darylshriver
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I would still say that Knowledge First Financial is a good option for those living in BC and interested in collecting government grants. . . they're one of the few institutions offering the BCTESG.

November 8, 2016
4:59 pm
Norman1
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Many financial institutions offer RESP accounts that can accept the one-time $1,200 British Columbia Training and Education Savings Grant, for BC resident children born in 2006 or later.

These are the 49 such participating financial institutions listed at http://www.gov.bc.ca/bctesg under the question Where can I access the grant?

1832 Asset Management L.P.
AGF Investments Inc.
Banque Nationale Investissements Inc.
BC Credit Unions
BMO Bank of Montreal
Canaccord Genuity Corp.
Canadian Scholarship Trust Foundation
Children’s Educational Foundation of Canada
CI Investments Inc.
Counsel Portfolio Services Inc.
Courtage Direct Banque Nationale Inc.
Credential Securities Inc.
Dundee Securities Ltd.
Fidelity Clearing Canada ULC
Fidelity Investments Canada ULC
Financière Banque Nationale Inc.
Global Educational Trust Foundation
Global Investments (Canada) Inc.
Global Securities Corporation
GMP Securities L.P.
Haywood Securities Inc.
Heritage Educational Foundation
HollisWealth Advisory Services Inc.
HSBC Investment Funds (Canada) Inc.
IA Clarington Investments Inc.
Industrial Alliance, Insurance and Financial Services Inc.
Invesco Canada Ltd.
Investors Group Trust Co. Ltd.
Knowledge First Foundation
Leede Jones Gable Inc.
Mackenzie Financial Corporation
Manulife Securities Incorporated
Manulife Securities Investment Services Inc.
MD Management Ltd.
National Bank Financial Ltd.
NBCN Inc.
Northwest & Ethical Investments L.P.
OceanRock Investments Inc.
Odlum Brown Limited
PFSL Fund Management Ltd.
PH & N Investment Services
PI Financial Corp.
Qtrade Securities Inc.
Quadrus Investment Services Ltd.
Raymond James Ltd.
RBC Royal Bank
Scotiabank
Sun Life Global Investments (Canada) Inc.
The Toronto-Dominion Bank
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