RESP payoff

More than half of parents have set up an RESP account to help fund their kid’s education, according to BMO.



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  • More than half of Canadian parents are turning to RESPs to help fund their children’s education, according to BMO. Of the 48% of survey respondents who have not set up an account, 60% say they can’t afford to contribute to one and 93% are not aware of the range of investment possibilities with the savings vehicle. But even parents who are having a tough time putting aside the extra cash can benefit by simply opening an RESP account. Remember the government will top up contributions made by family and friends at birthdays and other milestone celebrations. Pick up the September/October issue of MoneySense magazine on newsstands now for our complete guide to RESPs.
  • Good news for all you job seekers out there. More than 15% of employers surveyed by Manpower Inc. said they plan to add to their payrolls this year, while 75% plan to keep their staffing levels consistent. Job prospects are strongest in Western Canada due to the construction and mining sectors.
  • Your coffee maker, printer, DVD player and curling iron. They’ll all sucking back power and money when left plugged in. Trim your electricity expenses with these tips from Financial Highway. Want to slash your monthly bills even further? These simple improvements will save you thousands on electricity, gas and water.
  • A New York judge tossed out a class-action lawsuit by investors who claimed that ProShares did not fully disclose risks associated with investing in their leveraged ETFs and that they could result in substantial losses if held for longer than one day. Read the full story here. Meanwhile, U.S. regulators are looking into whether leveraged ETFs have caused some of the market volatility over the past several months.

2 comments on “RESP payoff

  1. RESPs are great you get a 20% bonus. Unfortunately the end game is the money is gone.

    Also with the fees to educate young people is going up at least 6% per year.

    One other idea which helps kids and parents is to consider in addition to RESPs is cash value insurance. Why? One is of course the need/want to protect the family. The other is in many cases money can be taken out tax free if taken out as a loan (which if repaid) the cash value is credited as if no money was taken out. The life keeps growing every year.

    Loans taken out by parents for the kids means if the child dies the parents are still on the hook for the loan.


  2. Group RESPs – Lack of Payout – Go Self Directed

    The problem with group RESP is not only the hefty fees and the problems if your child does not go to university or college, it is also the restrictions if your child does go college. The prospectus for the group RESP contains a lot of fine print that you may not think is important but will be used to restrict your access to the money earned by your money when it comes to payout.

    Child has a learning disability or wants to complete a program in 5 years rather than 4 — sorry, we don't accomodate.
    Child wants to change programs? Sorry, "child did not advance" – no EAP for you!
    Child had some difficulty and failed a couple of courses but is now back on track? Sorry, child did not advance — no EAP for you!
    Child is attending university out of town and classes don't start until Sept 6th? Sorry, paperwork including form from register must be filed by September 2! You will get your money in December!

    If you imagine an investment plan administered and controlled by the Soup Nazi, you have a pretty good idea of what the plans are like at payout time. Remember, every dollar they deny your child can be redistributed to cover "administrative costs" and/or boost the claimed returns to children they were not able to deny payments to — this is a good thing for the group administrators and sales people, because that's what the plan is about — sales and management fees — not educating children.


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