Investing

RDSP Investing - Stick to e-series or buy ETFs?

  • Last Updated:
  • Feb 16th, 2019 10:09 am
[OP]
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Aug 21, 2016
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RDSP Investing - Stick to e-series or buy ETFs?

Hi,

So we've had an RDSP for a decade now but due to the type of account, it seems we're stuck with TD as the only brokerage that allows this type of registered account. We've been using an e-series couchpotato strategy from the start and since I can't switch to something like Questrade, I was thinking to just pay the $9.99 per trade fee and buy ETFs at TD. What are your thoughts on this? Any better/cheaper suggestions or should I stay with e-series? Value of her account is around $100k. Thanks
15 replies
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Dec 6, 2010
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For a 100k account, I would definitely go for ETFs for lower fees and there is much more diversification available. For example instead of SP500 you may buy Total Market funds for the US market listed on NYSE.
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Jun 19, 2009
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gta_guy wrote:
Feb 13th, 2019 5:21 pm
For a 100k account, I would definitely go for ETFs for lower fees and there is much more diversification available. For example instead of SP500 you may buy Total Market funds for the US market listed on NYSE.
I agree, at 100k value, buying ETFs makes more sense.
[OP]
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Aug 21, 2016
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SkimGuy wrote:
Feb 13th, 2019 5:28 pm
I agree, at 100k value, buying ETFs makes more sense.
Thanks but would the best way be through TD at their $9.99 rate? Any other option that I'm not seeing?

For TFSA is Questrade still the RFD go-to for ETFs?
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Oct 14, 2001
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I'd use ETF especially now since we have all-in-portfolio ETF's like XGRO, VBAL, HCNS, and others. I'm sure you could find one that suits your need.
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Dec 22, 2008
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fern54 wrote:
Feb 13th, 2019 6:05 pm
Thanks but would the best way be through TD at their $9.99 rate? Any other option that I'm not seeing?

For TFSA is Questrade still the RFD go-to for ETFs?
Yeah I’d eat the $9.99 fees now and then next year start buying e-series again for a few years.

Questrade is good for ETF’s but Wealthsimple’s ETF buying platform might be better?
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Jan 28, 2007
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To have $100k in a RDSP you have to have been contributing more than they match or grant in the 10 years.

Our sons RDSP is with TD as well, and I stick to ETF's ... make sure you get diversity though.
[OP]
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Aug 21, 2016
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Jojo_Madman wrote:
Feb 13th, 2019 8:11 pm
To have $100k in a RDSP you have to have been contributing more than they match or grant in the 10 years.

Our sons RDSP is with TD as well, and I stick to ETF's ... make sure you get diversity though.
It's about $15k contribution, $45k grants, $40k+ gains. Are you justing eating the $9.99 fee to do ETF's?

Thanks all.
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Jan 28, 2007
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fern54 wrote:
Feb 13th, 2019 8:50 pm
It's about $15k contribution, $45k grants, $40k+ gains. Are you justing eating the $9.99 fee to do ETF's?

Thanks all.
Ah, we didn't qualify for the grant part, so that makes sense now.

Given that I don't "actively" trade in his account, I just eat the commissions and factor it into my purchase price targets, as in I look for dips and pullbacks to buy lump sums. I'm only making 2-3 trades a year and synthetically dripping the dividend proceeds each month or quarter fee free.
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Dec 28, 2010
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We have been contributing to our son's RDSP for a long time as well. I did buy various stocks but about 78% is in a TDB902 which has generated an interesting amount. Yesterday we received a letter from the government where they explain our new contribution room for 2019. In this letter, it states you have to wait 10 years before you can take out any money since the last government contribution. I knew this but assumed it was since the last contribution for that year, i.e. you deposit $1000 for example in 2010, collect the grant and you can take that out in 2020. Is that not how it works? Otherwise, you would need to stop contributing in 20xx, wait ten years without contributions and start taking out in 20xx plus ten.
Actions speak louder than words
[OP]
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Aug 21, 2016
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VESTEGAARD wrote:
Feb 16th, 2019 7:52 am
We have been contributing to our son's RDSP for a long time as well. I did buy various stocks but about 78% is in a TDB902 which has generated an interesting amount. Yesterday we received a letter from the government where they explain our new contribution room for 2019. In this letter, it states you have to wait 10 years before you can take out any money since the last government contribution. I knew this but assumed it was since the last contribution for that year, i.e. you deposit $1000 for example in 2010, collect the grant and you can take that out in 2020. Is that not how it works? Otherwise, you would need to stop contributing in 20xx, wait ten years without contributions and start taking out in 20xx plus ten.
Its the latter. But even in that case you may still get govt bond contributions that are given without any contribution and then can be clawed back under the 10 year rule. Unless the income level being too high to get any contribution from the government while still qualifying for the DTC (highly unlikely) the earliest most people can withdraw without loss of some government portion is age 60. So this is really more a replacement for an RRSP for the disabled.
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fern54 wrote:
Feb 16th, 2019 8:40 am
It's the latter.
So it's not really a good replacement for an RESP, which I thought it would be.
Actions speak louder than words
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Jan 28, 2007
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VESTEGAARD wrote:
Feb 16th, 2019 9:30 am
So it's not really a good replacement for an RESP, which I thought it would be.
No No No ... two completely different savings vehicles.
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Jan 28, 2007
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fern54 wrote:
Feb 16th, 2019 8:40 am
Its the latter. But even in that case you may still get govt bond contributions that are given without any contribution and then can be clawed back under the 10 year rule. Unless the income level being too high to get any contribution from the government while still qualifying for the DTC (highly unlikely) the earliest most people can withdraw without loss of some government portion is age 60. So this is really more a replacement for an RRSP for the disabled.
X2 ... DITTO

In our case, given our sons disability, our intended plan is to ensure that their is funds set aside in the event he outlived us, and needs some form of assisted living or with a relative without any financial burden.

If you haven't already, you need to also look into setting up a Henson Trust if this is for someone other than yourself ....
[OP]
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Aug 21, 2016
178 posts
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VESTEGAARD wrote:
Feb 16th, 2019 9:30 am
So it's not really a good replacement for an RESP, which I thought it would be.
No it wouldn't be, the penalty for removing generally before 60 is too high. This would be a replacement for an RRSP for those that are disabled. The government contribution can be seen as replacing what an employer typically would contribute.

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