Personal Finance

Two Quick RESP Questions

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  • Aug 29th, 2016 12:12 pm
Member
Feb 18, 2013
309 posts
95 upvotes
Scarborough

Two Quick RESP Questions

I recently opened up a mutual fund RESP @ TD bank for my daughter, and converted it to an e-series account.

I've purchased $1600 of funds, and am wondering how the 20% government top-up (CESG) works (we only qualify for 20% based on income)

1) Will the 20% be deposited into the account, and if so how long does it take?

2) The government only matches 20% up to a maximum of $500 per year, but is that based on a calendar year (Jan-Dec) or from the date I make the first deposit? (Aug-July)

Thanks for your help!
25 replies
Deal Addict
Oct 11, 2010
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Charlottetown
It takes a little while to receive the grant after a deposit is made, sometimes a month or more in my experience

I believe it goes by calendar year
Deal Addict
Mar 10, 2010
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It's always been a minimum of one month and closer to two months for me. I think what they do is report the deposits at the end of each calendar month and the government then sends the grant ~30 days later, so if you deposit on the 3rd of 4th of a month you'll be waiting a long time. Somebody can correct me if I'm mistaken in this.
Newbie
Aug 9, 2015
76 posts
39 upvotes
Parksville, BC
1) CESG is deposited on the last day of the month following the deposit
2) $500 maximum grant (deposit of $2500) per calendar year. With one year "catch-up" contributions also attracting the grant, if you haven't maxed out the grant in previous years.
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Jul 5, 2004
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Slightly off topic, but are all RESP's at the big banks the same?
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Apr 29, 2008
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Shaner wrote: Slightly off topic, but are all RESP's at the big banks the same?
they don't offer all the RESP grants.
Basic 20% will be the same.
Depending on your province and income, you must select a bank registered for all benefits you qualify for.

Annual fees could be different too.

There are differences, shop before you decide.

Example: for Quebec residents, there is a difference between TD Direct and TD Mutual Funds.
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Jan 6, 2015
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caddie444 wrote: I recently opened up a mutual fund RESP @ TD bank for my daughter, and converted it to an e-series account.

I've purchased $1600 of funds, and am wondering how the 20% government top-up (CESG) works (we only qualify for 20% based on income)

1) Will the 20% be deposited into the account, and if so how long does it take?

2) The government only matches 20% up to a maximum of $500 per year, but is that based on a calendar year (Jan-Dec) or from the date I make the first deposit? (Aug-July)

Thanks for your help!
How did you convert your mutual fund RESP to e-series? The TD bank I go to is clueless -_-

Also once you convert, can you access it online, or do you have to go to the bank to purchase more e-series?
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Aug 22, 2011
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Shaner wrote: Slightly off topic, but are all RESP's at the big banks the same?
The banks offer both self directed and "actively" managed avenues, with the latter either a GIC or the more popular (for those who are not comfortable investing themselves) MF with MERs.
Member
Feb 18, 2013
309 posts
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Scarborough
foodyforlife wrote:
How did you convert your mutual fund RESP to e-series? The TD bank I go to is clueless -_-

Also once you convert, can you access it online, or do you have to go to the bank to purchase more e-series?
I opened up a mutual fund RESP at the branch, then had them print off the e-series conversion form which I filled out and they mailed in for me: https://www.tdcanadatrust.com/document/ ... ccount.pdf

(The lady who helped me knew nothing of e-series btw)

You need access to easyweb so you will need them to set that up if you don't have it already (they give you an access card #)

You wait until you get the email saying your mutual fund account has been converted to an e-series account

And then you can purchase/sell e-series funds to your hearts content yourself on easyweb

Note that I chose not to purchase any funds until the mutual fund RESP was converted to an e-series, you will hear about ppl needing to park their funds in something like a money market fund until it's converted, but if you wait until it's converted you don't have to park the money anywhere.
Newbie
Feb 11, 2007
22 posts
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Airdrie, AB
I'm probably mistaken, but I was under the impression that the TD e-series MFs weren't eligible for the government contributions.
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Aug 22, 2011
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soultrance wrote: I'm probably mistaken, but I was under the impression that the TD e-series MFs weren't eligible for the government contributions.
Yes, you are mistaken.
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Apr 29, 2008
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soultrance wrote: I'm probably mistaken, but I was under the impression that the TD e-series MFs weren't eligible for the government contributions.
TD mutual funds account is not eligible for Quebec gov. contribution. It is for Federal CESG. You are partially right.

If you are from Quebec and you are not eligible for low income Canada Learning Bond, open a TD Direct (TD Waterhouse) account if you are interested in e-series, which can be used to buy e-series... and get 20% from federal and 10% from Quebec, total 30%.

That's what I did personally.

That's one example why research is important depending on your province and your income.
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Apr 29, 2008
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vkizzle wrote: Yes, you are mistaken.
User is right for Quebec, Saskatchewan and British Colombia grants. Answer depends of province...

Source:
1 The TD Mutual Funds Education Savings Plan supports only the basic Canada Education Savings Grant and not any other provincial or federal government RESP grants or tax incentives
https://www.tdcanadatrust.com/products- ... n-resp.jsp
Last edited by cashinstinct on Aug 26th, 2016 12:20 pm, edited 2 times in total.
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If i already have a rrsp td eseries account, do i have to do the entire process again if i want to open a resp td eseries account?
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Jun 10, 2008
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Ducky wrote: If i already have a rrsp td eseries account, do i have to do the entire process again if i want to open a resp td eseries account?
Yup - I wanted to add my second kid to the family RESP account which was already set up as an e-series account and the rep ended up setting up a whole new account and I had to send in the request form to convert that.
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Jul 1, 2007
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TD Mutual Fund RESP also isn't eligible for the additional CESG or Canada Learning Bond last I checked.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
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Jan 18, 2003
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Thalo wrote: TD Mutual Fund RESP also isn't eligible for the additional CESG or Canada Learning Bond last I checked.
Explain?
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Ducky wrote:
Thalo wrote: TD Mutual Fund RESP also isn't eligible for the additional CESG or Canada Learning Bond last I checked.
Explain?
You can get additional CESG or Canada Learning Bond if your financial institution allows it. TD Mutual Funds does not.

Therefore, before opening an account, one must verify what programs they are eligible for, depending on family income, and if the account they plan to open works.

Good summary: http://www.getsmarteraboutmoney.ca/en/m ... bonds.aspx


Additional CESG:
http://www.esdc.gc.ca/en/student_grants ... ility.page
The first $500 contributed into a child’s RESP, the Additional Canada Education Savings Grant could add:

$100, if net family income is $45,282 or less ($500 x 20% = $100)
$50, if net family income is between $45,282 and $90,563 ($500 x 10% = $50)
it's the same $7,200 total CESG that is available per child, but you can get it with less contributions to RESP since you can get $100 or $50 more per year.

If you plan to add $2,500 per year per child to RESP, additional CESG won't do nothing for you.

________

Canada Learning Bond:
http://www.esdc.gc.ca/en/education_savings/clb.page
Get up to $2,000 for your child's Registered Education Savings Plan (RESP)—without having to put in any of your own money!

The Canada Learning Bond offered by the Government of Canada helps parents get a head start in saving for their child's education.

The money you get for your child could include:

$25 to help cover the cost of opening the RESP;
$500 to add to the RESP now, to help you start saving early; and
an extra $100 each year until the calendar year he or she turns 15, as long as you continue to receive the National Child Benefit Supplement.
Your family income in 2016 must be less than $45,282 a year.
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Jan 18, 2003
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cashinstinct wrote:
Ducky wrote:
Thalo wrote: TD Mutual Fund RESP also isn't eligible for the additional CESG or Canada Learning Bond last I checked.
Explain?
You can get additional CESG or Canada Learning Bond if your financial institution allows it. TD Mutual Funds does not.

Therefore, before opening an account, one must verify what programs they are eligible for, depending on family income, and if the account they plan to open works.

Good summary: http://www.getsmarteraboutmoney.ca/en/m ... bonds.aspx


Additional CESG:
http://www.esdc.gc.ca/en/student_grants ... ility.page
The first $500 contributed into a child’s RESP, the Additional Canada Education Savings Grant could add:

$100, if net family income is $45,282 or less ($500 x 20% = $100)
$50, if net family income is between $45,282 and $90,563 ($500 x 10% = $50)
it's the same $7,200 total CESG that is available per child, but you can get it with less contributions to RESP since you can get $100 or $50 more per year.

If you plan to add $2,500 per year per child to RESP, additional CESG won't do nothing for you.

________

Canada Learning Bond:
http://www.esdc.gc.ca/en/education_savings/clb.page
Get up to $2,000 for your child's Registered Education Savings Plan (RESP)—without having to put in any of your own money!

The Canada Learning Bond offered by the Government of Canada helps parents get a head start in saving for their child's education.

The money you get for your child could include:

$25 to help cover the cost of opening the RESP;
$500 to add to the RESP now, to help you start saving early; and
an extra $100 each year until the calendar year he or she turns 15, as long as you continue to receive the National Child Benefit Supplement.
Your family income in 2016 must be less than $45,282 a year.
Thanks for the info... Too bad my family isn't eligible for the additional cesg or the learning bond.... So i guess I'm safe to stick with td eseries resp when the time comes...

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