Author Topic: RESP in Sask Canada - best investment ideas  (Read 944 times)

Prairie Stash

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RESP in Sask Canada - best investment ideas
« on: June 02, 2016, 04:20:13 PM »
I have one account for now while I sort out this mess. I contribute $3500/year to get the 20% match from CESG and in Sask. theres 10% matching for SAGES - combined match max of $750/year.

Here's the bad part, the list of places that can hold my money is small. I can have it with RBC and get mutual funds but if it goes to RBC Direct the 10% grants disappear. Same thing with TD, in bank mutual funds are okay but e-series are not set up to receive the grants. If money is moved to an ineligible account the money is permanently revoked. I looked into putting my money in, getting the grants, and then moving my $2500, that is not allowed either (grant still disappears).

There's a 15 year timeline before the money is needed, tentative school date of 2031. When you consider MER's on mutual funds, around 2% on the mutual fund available, am I better off buying an ETF and forgoing the 10% match? Will lower fees over the next 15 years beat the guaranteed match and high fees? seriously, the mutual funds are the same as an ETF, its all the same risk.

RichMoose

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Re: RESP in Sask Canada - best investment ideas
« Reply #1 on: June 06, 2016, 09:51:30 AM »
Wow that's interesting, looks like SAGES is set up so that you can only receive the grants with a full-service brokerage. It's almost like a subsidy to the high-fee brokerage industry. You're financially better off to stay with higher cost mutual funds unless the account value gets really high. Especially because you have to pay SAGES back if you transfer out at what would be the break-even point (about $15,000).

This program is so crazy, if I was a Saskatchewan resident with kids I would be writing a letter to my local MLA and the Education Minister.

Prairie Stash

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Re: RESP in Sask Canada - best investment ideas
« Reply #2 on: June 13, 2016, 02:55:02 PM »
Thank you tuxedo. I'm confused if its just the $250 grant or $250+the accrued gains I'll pay back (calculated as a percentage of the total).

The letter is a good idea. I'll write one today suggesting ways to improve. basically I want the same investment choices as my RRSP or TFSA, leaving more money for education and less for fees.