⚠️ Beware of Group RESPs! #shorts

An RESP = Registered Education Savings Plan, a government registered investments account in 🇨🇦

But, there’s also something called a ‘Group RESP’, which is where money from multiple families are pooled together in one ‘trust’. The problem is that there are high fees, a strict contribution schedule and the money is invested in less than ideal investment options (aka low returns).

And that strict contribution schedule specifically can really hurt people - if you miss a contribution (for any reason - life changes over a 17 year period), you can be charged penalty fees, interest or they can completely terminate your account without returning your investment earnings to you. On top of that, if you sign up for an account and then realise all of these cons, trying to withdraw your money ealy could also cause you to lose all of your investment earnings.

Group RESPs are predatory - there are countless examples of people losing money, paying massive fees, and other negative experiences. If you want to save (aka invest) for your kid’s education, look into Individual RESPs instead!

#PersonalFinance #MoneyTips #HowToInvest #InvestingForKids #InvestingMoney #InvestingTips #RESP #RegisteredEducationSavingsPlan #GroupRESP #EducationSavingsPlan #EducationSavings #GroupRESPDangers

#shorts

[ukaserex]

For the US, you want a 529 plan for your kids.

[dannohumph]

I set up an RESP in October. After seeing this skit, I didn’t think much of it, but after doing a little digging in preparation for a max out, I realized my RESP was in fact a Group RESP, we halted the max out and we’re setting up a new RESP with our bank and transferring out in the coming weeks. Thx!

[lyg]

Oh this is definitely a thing to watch out for 😮.

[NikiLivi]

Be careful in the US of the state funded college savings programs. All but my oldest had/have one. My oldest got 4 years paid for by my grandparents but got enough in scholarships that she didn’t need it and is saving it for a down payment on her first home. My other 4 have the state program paid by my grands for 2 years. Our local community college changed their rules with my 2nd child who had 2 scholarships that would completely fund her first 2 years but because she had the state program they only honored 1 of her scholarships because they now offer free tuition to anyone who doesn’t have college savings or scholarships. I was so mad! She lost 1 scholarship basically because they didn’t want to give her that money back.

[khemyoderinde]

How about a family RESP for all my kids?

[Savvy.Powerhouse]

Hello. The information is completely wrong! In fact, group RESPs are probably some of the best savings you could have. 1. There is no high fees. The fees are calculated for 17 years and yes it's paid upfrong, but the child will receive 50% of the fees paid back plus bonus which makes it up to 95% of the fees paid at the beginning. Second. There is no fees if they miss out their contribution. They can contribute their missed savings so that they can get the grants. There is no interest lost or penalty. 4. The fees they pay for a group max plan is 30 percent of what they would pay with the bank and they will receive back those as mentioned above. People who get the calls do request the information. No one calls them unsolicited. For Gods Sake, please stop spreading misinformation for getting views. I am going to report this as misinformation.

[chrisconsorte]

I’m so glad I never had any children!!