Author Topic: Canadians with kids how are you handling their RESP's?  (Read 1797 times)

strider3700

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Canadians with kids how are you handling their RESP's?
« on: December 20, 2013, 11:39:19 AM »
I've got 2 kids,  both have been getting contributions to max out their RESP matching since birth.  It's an automated deposit so I don't even notice it.   A couple of years back I saw that they had almost 3k in cash so I turned that into a 5 year GIC at a pathetic 3.25%.  I just looked and there is another 9k in cash sitting in there.  Rates are even lower on GIC's now (2.3% 5 year) and I have no interest of locking cash up for 5 years at that rate. 

 They won't need the money for at least a decade so I'm wondering what my options are and what others are doing. 

TrMama

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Re: Canadians with kids how are you handling their RESP's?
« Reply #1 on: December 20, 2013, 11:49:29 AM »
I have mine invested in some sort of mutual fund. I know, I know, mutual funds are the devil. However, I've also found that the investment options for RESPs are a bit more limited than other types of investment accounts. Someone please correct me if I'm wrong.

For me, the biggest value is in getting the most grant $ possible from the government. I believe it's a max of $500/yr, provided you contribute $2500/yr. That's a better return than I'm likely to see with anything else.

I believe the particular account I have also rebalances over time from more aggressive to less aggressive. So you're less subject to market corrections as the child approaches university age. This is a common feature of RESP funds.

strider3700

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Re: Canadians with kids how are you handling their RESP's?
« Reply #2 on: December 20, 2013, 12:01:49 PM »
Apparently you can put anything you want that can gointo an RRSP  into the RESP account.  Mine is with the bank and it requires going in in person to do anything.  Huge pain in the ass.  They also don't list any details about what can go into it and want you to go see them in person.

daverobev

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Re: Canadians with kids how are you handling their RESP's?
« Reply #3 on: December 20, 2013, 12:22:05 PM »
Same as with my retirement stuff - stocks (or rather, ETFs).

We have a newborn so I know the money has ~18 years to grow at this point, so there is no point (IMHO) getting 'savings' rates - values may fall etc etc sure but if values fall they'll come back.

Currently just ZCN and VUN, will add bonds and maybe ZRE later on. For this I'm staying all in CAD$.

strider3700

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Re: Canadians with kids how are you handling their RESP's?
« Reply #4 on: December 20, 2013, 12:24:45 PM »
and are you doing this through a bank or did you set it up with someone else?

daverobev

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Re: Canadians with kids how are you handling their RESP's?
« Reply #5 on: December 20, 2013, 01:14:14 PM »
I already have accounts with Questrade. It's free to buy ETFs with them, and the MER on the ETFs I buy are lower than on the TD eSeries.

They should deal with all the grant stuff, AFAIK, too.