Personal Finance

RESP-- contribution for 2012 for a RESP opened in 2013

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  • Nov 10th, 2013 8:44 am
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[OP]
Newbie
Feb 21, 2012
20 posts
3 upvotes
GTA

RESP-- contribution for 2012 for a RESP opened in 2013

I opened a RESP plan for my elder daughter after a month of her birth in July 2009. At that time had very little finances knowledge so opted for Global scholorship plan offered by a 'friend' . The total funds shown in our portfolio now is $ 11k.

Had another daughter born in Nov 2012 and i thinking of openinga self directed RESP with TD e-series account. My questions are:

(1) Can i contribute a total of $ 5000 in this month when i open the TD account for little one towards the contribution for 2012 and 2013 OR I can contribute only for the months for Nov and Dec 2012 as she was born in Nov2012 . In Nutshell can i contribute for full year of 2012 even though the birth was in month # 11.

(2) Does it make sense to go for TD e series RESP for daughter # 2 instead going for Global Schloroship plan where i can convert the first RESP into a family plan and then have the flexibility of using the funds for the education of either one. I very well under stand the poor growth in schlorship funds and the huge penalities of early termination etc. But can the TD self directed RESP still outweigh the benefits of having a family account rather than 2 individual accounts. What would you do in this situation?
8 replies
Member
User avatar
Mar 2, 2010
428 posts
37 upvotes
For #1 - Moth of birth does not matter. You will be allowed $2500 for 2012 and $2500 for 2013. So yes, you can contribute $5000 today and get matching for both years.
Note that you will lose matching for 2012 as soon as 2014 hits. So better make the contribution fast.

Don't know enough about the Global Scholarship plan to comment on #2. All I can suggest is to create RESP for both daughters in TD. Stop contribution in Global Scholarship and let that money just sit there. Have all future contributions go where you want them to go. I am not sure about cost of moving money RESP out of Global Scholarship.
Deal Addict
Oct 21, 2012
1378 posts
474 upvotes
Toronto
n2d2 wrote:
Nov 7th, 2013 3:42 pm
For #1 - Moth of birth does not matter. You will be allowed $2500 for 2012 and $2500 for 2013. So yes, you can contribute $5000 today and get matching for both years.
Note that you will lose matching for 2012 as soon as 2014 hits. So better make the contribution fast.

Don't know enough about the Global Scholarship plan to comment on #2. All I can suggest is to create RESP for both daughters in TD. Stop contribution in Global Scholarship and let that money just sit there. Have all future contributions go where you want them to go. I am not sure about cost of moving money RESP out of Global Scholarship.
I do not believe you lose contribution room for past years. There is a limit to CESG per year though.
Sr. Member
Aug 16, 2010
502 posts
85 upvotes
Thornhill
n2d2 wrote:
Nov 7th, 2013 3:42 pm
For #1 - Moth of birth does not matter. You will be allowed $2500 for 2012 and $2500 for 2013. So yes, you can contribute $5000 today and get matching for both years.
Note that you will lose matching for 2012 as soon as 2014 hits. So better make the contribution fast.
You don't lose it; you're just restricted to catching up on one year at at time. So If you're behind 2 years, then it'll take you 2 years with double contributions to catch up.
[OP]
Newbie
Feb 21, 2012
20 posts
3 upvotes
GTA
n2d2 wrote:
Nov 7th, 2013 3:42 pm
.

Don't know enough about the Global Scholarship plan to comment on #2. All I can suggest is to create RESP for both daughters in TD. Stop contribution in Global Scholarship and let that money just sit there. Have all future contributions go where you want them to go. I am not sure about cost of moving money RESP out of Global Scholarship.
Is it possible to move money out of scholarship plan to TD e series RESP. The global scholroship plan had an enrollment fee of $4900. Will I loose all the enrollment in moving out of that plan?
Deal Fanatic
Jul 1, 2007
8202 posts
1103 upvotes
You cannot move money out of the scholarship trust without losing a bunch due to fees.

To answer #2 in your original post, scholarship trusts NEVER make sense over regular RESPs and have absolutely no benefits whatsoever. You got screwed with the first child, and are stuck with it, so why would you even consider going back to them again?
Money Smarts Blog wrote:
Nov 29th, 2010 11:18 am
I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Fanatic
User avatar
Feb 25, 2004
5655 posts
149 upvotes
New Westminster
You can phone the CESG group (Cdn Government) and they will tell you how much RESP headroom you have for each child.
See here: http://www.canlearn.ca/eng/savings/contact_cesp.shtml for contact info.

You can either phone and they will tell you the current numbers or, apparently, you can write and they will give you the entire history
http://canadianmoneyforum.com/showthrea ... Statement?
[OP]
Newbie
Feb 21, 2012
20 posts
3 upvotes
GTA
Thanks for the replies everyone. Today I went to a local TD branch to open the TD mutual fund RESP account. Today I contributed only $100 and put in money market fund. Now i will send the request for conversion to e-series fund and will contribute remaining $4900 towards the year 2012-13 . TD rep was not sure if i can pull money out of the money market without any penalty before 90 days period.
Deal Addict
Feb 4, 2003
2085 posts
109 upvotes
There is no penalty for withdrawal from money market funds. When you get the government contributions, TD will deposit it in the money market fund and it up to you to move it to another fund if that what you want to do.

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