Tag Archives: budgets

Advantages and Disadvantages of Holding a Registered Education Savings Plan, RESP, Through a Bank or Credit Union

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We started our first family plan RESP at the local branch of our bank where we have one of our chequing accounts. It’s very common for parents to open an education savings plan where they bank. There are pros and cons to keeping the RESP at a bank branch, especially as the amount of money it holds grows larger: here are some of these advantages and disadvantages.

Common advantages of Holding a RESP at a Bank or Credit Union

You can speak with someone who already knows (or should know) a bit about your personal financial situation.

If there are any hiccups or delays in creating your plan or receiving any grants, your branch staff will usually want to help sort it out to keep you as a happy client for other additional services.

You can start and stop contributing depending on your budget. There is no penalty for stopping contributions.

There is usually no fee to have this type of an RESP account although always check before signing anything.

Most bank-hosted RESPs are eligible for all of the various federal and provincial matching education grants. Always check, though, before opening a plan!

You can invest easily within the RESP in

  • a daily interest savings account
  • guaranteed investment certificates, GICs
  • mutual funds offered by that bank or credit union

You can usually buy small GICs, for example a $500 one; Some brokerages require you to buy at least a $5000 certificate.

If you choose to invest only in savings accounts and GICs, you will not pay any annual “management” fees or MERs. The amount you are told you will receive, such as 2% per year for a GIC, is the amount you will get.

You can often buy the mutual funds with no initial fees or fees that have to be paid if you cash them out before some pre-set time. All mutual funds, though, have an annual management expense fee. That fee comes out of the amount you are paid each year from the fund, or from the value of the individual units of the fund. You don’t have to write a cheque to pay it.

You can often set up a steady purchase plan where an agreed amount is contributed to your plan each month and invested as you have requested.

You can get some advice about which products to invest in. The advice, however, may be biased if the representative has been told to try to sell more of a certain mutual fund than of another.

Some Disadvantages to Holding a RESP at a Bank or Credit Union

You can’t always choose a mutual fund that has a low management expense ratio and that holds the type of assets that you would like. For example, you might not be able to buy a mutual fund that replicates the performance of the TSX with a low MER.

You may have to update your risk profile and investing profile if you wish to change the nature of your investments. For example, if you have only invested in GICs in the past, you may have to fill out another form to begin investing in equity mutual funds. (Big Cajun Man even experienced this problem with his regular mutual fund savings account.)

You usually cannot buy mutual funds or GICs offered by a large number of institutions. Most often you can only buy the types of these products which have been issued directly by your bank or credit union.

You often cannot buy Exchange Traded Funds, ETFs. Or if you can, you may be limited to those offered by the bank and not those you want with low MERs.

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Did you open your first RESP at a bank? Have you been happy with the experience or have you switched to another type of RESP? I’m sure there are more advantages and disadvantages that I have over-looked. Please share your views with a comment.

A Review of Great Canadian Rebates and SoftMoc Online Shopping

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The other day (in 2014) I realized one of my children needed boots again to cope with the long trudge to school in the pouring rain. (Yes, some kids DO still have to walk to school. They have rotten parents, from what I’m told.) The last pair were Cougars which had lasted well and had fit comfortably.  So while we were at “the Mall” we looked at Sears to see what they had this time. Unfortunately, it appears Sears no longer stocks Cougars (especially since now, in 2017 Sears is bankrupt). So when we were home, I went online to find out who sells Cougars. The result was that I ended up successfully using Great Canadian Rebates again and saving 5% off my purchase price from SoftMoc.

Who Sells Cougars In Canada?

I quickly discovered that SoftMoc sells Cougar boots in Canada. The only downside was that the boots we wanted to buy are not carried at the SoftMoc stores. Instead they have to be ordered online.

Always Check the Online Return Policy Before Buying

Children’s feet don’t stay the same size from year to year which makes it tricky to buy footwear without trying it on. So I was uneasy about ordering boots online from SoftMoc.

When I checked the details of their Return Policy, however, I calmed down. I could return boots ordered online that didn’t fit to any store location for a full refund.

Always Check the Details for Free Shipping Before Buying Online Too

The other qualm was the infamous shipping fees. Fortunately, SoftMoc offers free shipping to most of southern Canada on reasonably priced goods.

As a bonus, I could also get the order delivered to my nearest SoftMoc store. That meant I wouldn’t have to worry about being available when the courier arrived with the order. (Our workplaces do NOT like to receive personal mail or parcels.) It also meant that if the boots didn’t fit, they could be “returned” immediately at the store with no delay or dispute that they had been worn or damaged.

At that point, I nearly hit the Buy button. But then I thought: I wonder if I can get a discount or cash back on these?

Never Buy Online Before You Check If Great Canadian Rebates Has a Cash-back Reward for Your Order

So I signed in to my Great Canadian Rebates account.

Sure enough, they deal with SoftMoc! In fact, at that time they were offering a 5% rebate on any online purchases made there. All I had to do was start shopping by selecting SoftMoc from the drop-down list of stores under the Merchant heading at the top of the page.

UPDATE: Unfortunately in November 2017, SoftMoc doesn’t currently have a relationship with Great Canadian Rebates. Keep checking though as things often change.

(If you’d like to join Great Canadian Rebates, please consider using my referral link. https://www.greatcanadianrebates.ca/Register/171462/
You’ll be enrolled the same as if you join any other way, but I will get a reward if you shop using their website. It won’t cost you anything and it would be greatly appreciated by me. Thanks to some other kind readers who joined this way, one of my children got the new Vet Volunteers book for free using my rewards.)

So I went to the SoftMoc website from the link on my Great Canadian Rebates page (after signing in) and placed my order.

The order was shipped, as promised within one business day.

I received a phone call from the SoftMoc store telling me my order was in even before I received the confirmation emails that my order had shipped.

We went to the store after school and to my amazement, the boots fit.

That was almost too easy. (I’m sure any parent who has driven their child from store to store desperately trying to find foot wear that fits, and that the child can stand the colours of, will agree this was a major win.)

How Would I Rate the SoftMoc Online Shopping Experience

For my test, the entire process went very well. I will shop from their website again in the future.

Did I Get My Money from Great Canadian Rebates?

Well, I will. They have a policy of paying out after 45 days. This avoids (most) problems with people returning goods after they have paid out the cash back reward.

I can see the correct amount is waiting in my GCR account. I have received other payments correctly.

Will I Use Great Canadian Rebates Again?

Yes.

I have used them in the past and it works. For one extra step for online shopping, I have often saved 2-5% off my bill. Given that my savings account (except for the promotional rate money at Tangerine and PC Financial) is usually only earning 1.3%, this seems like a good saving.

In fact, I just signed in to Great Canadian Rebates and used their link to go to Walmart.ca to buy some Hallowe’en handouts, laundry soap, and cornstarch. All of these were on sale and the bonus is that I won’t have to waste any gasoline driving to buy them in person. Plus they have a promotional reward rate of 4% this week (mid-October 2014.)

UPDATE: In July 2016, Walmart is not a store I can shop at through Great Canadian Rebates but I’m hoping they will return again in the future.

If You Want to Sign Up for Great Canadian Rebates

I wrote an earlier article about how to sign up for Great Canadian Rebates. Whether you choose to use my link and also earn me some rewards is up to you. (Thank you if you do, though!) Even if you don’t, though, consider using this method to save a bit of money on a purchase. If you receive your rebates as amazon.ca certificates you can get paid quickly.

The link that lets you join and gives me a bonus is:
https://www.greatcanadianrebates.ca/Register/171462/
then click on the Not a Member Join Up Here link at the top right side of the screen.

Otherwise, just type the greatcanadianrebates address in your browser to get there with no connection to me.

NOTE:  I am never told who used my link, so I won’t be able to thank you personally. They want to keep your identity 100% private.

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Do you shop through any websites that give you a rebate or reward in addition to that offered by the store itself? Please share your insights with a comment.