Personal Finance

Recommendations for first RESP account

  • Last Updated:
  • May 22nd, 2019 10:43 am
[OP]
Deal Addict
Jul 11, 2008
1886 posts
1444 upvotes

Recommendations for first RESP account

Any advice/recommendations for someone with little investment knowledge in terms of opening their first RESP account for a toddler?

I have heard of services such as couch potato but my knowledge of investments is pretty much limited to narrowing options down based on the MER. For someone with little knowledge in the area, where/what type of account would you recommend for a toddlers RESP? I'm not expecting to maximize growth but would hope for some steady growth (which would involve some level of risk I am aware).

As much as I would like to learn more about investments, just don't see myself being able to devote the time to it right now so essentially looking to park the contributions for a while and add to them as able.
Last edited by adilh53 on May 21st, 2019 5:50 pm, edited 1 time in total.
5 replies
Deal Expert
User avatar
Sep 19, 2004
23975 posts
5610 upvotes
where I belong
There are SO MANY RESP threads on RFD as well, take a look

I just did the easiest
TD RESP Family account (which contains 1 account per kid if you have more), then buy the TD e-series MF inside (basically US index or Canadian index), done
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Deal Addict
Jun 10, 2008
1127 posts
339 upvotes
jerryhung wrote: There are SO MANY RESP threads on RFD as well, take a look

I just did the easiest
TD RESP Family account (which contains 1 account per kid if you have more), then buy the TD e-series MF inside (basically US index or Canadian index), done
+1
Deal Addict
Jul 15, 2009
2147 posts
1288 upvotes
Whatever you do, don't get a group plan from a company that specializes in only RESPs. When they come up to you on the street when you're out with your stroller and say, hey buddy, wanna buy an RESP, that's the one not to get.

Get a self-directed RESP from a bank, discount broker, or mutual fund company.

The banks will happily give you advice on what to buy in exchange for a 2% annual MER, so roughly 36% of your investment over the 18 years or so that it takes a kid to reach post-secondary age. That's a lot to pay for the advice but still a better deal than the group plans.

If you want cheaper advice than that, I'd start by reading about the Canadian Couch Potato Model Portfolios.
Jr. Member
Sep 10, 2017
172 posts
163 upvotes
+1 for Wealthsimple. They help you understand your investments with them, diversify your portfolio with low fee ETFs, automatically rebalance and reinvest dividends, and have pretty great customer service through email and a great online interface with no need to mail anything in, and automatically get your grants.

For your case you'll likely have a growth portfolio which will have a 0.6-0.7% total expense ratio (including Wealthsimples 0.4-0.5% fee and MER of the ETFs they buy for you). Of course this is more expensive than the 0.2% if you got the ETFs and rebalanced yourself, they just make life a lot easier. Plus there's no fee for buying/selling/rebalancing and they buy US ETFs in USD with a low currency conversion rate, so if you want to do despots often (weekly, monthly etc) it's much easier than doing it yourself.

You can send me a PM or respond here if you have any questions.

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