This is a sponsored post.
It was purely coincidental that at the exact time I was selected to tell you about opening an RESP at RBC, I was actually about to set one up for Little Miss Cub. So rather than just sharing some basic info about RESPs with you and encouraging you to open one at RBC (where I do happen to be a happy customer since 2008), I can actually tell you how my experience went opening an RESP for our family’s new addition while it is fresh in my mind!
When I was pregnant with Cub, I attended a Baby Expo and signed up for every draw to “win money for your child’s RESP.” The ballots always asked for my due date. What I didn’t know was that each and every one of these private RESP companies was about to start calling me a week past my due date to try and sell me an RESP (and not to tell me I’d won $500). I couldn’t get off the phone with some of these salespeople without being far ruder than I care to be, despite a newborn screaming in the background. This high pressure sales tactic really turned me off, and given we were happily doing all of our other banking (chequing, mortgage, line of credit, RRSPs and credit cards) with RBC, opening our first child’s RESP there made perfect sense.
Learning New Things the Second Time Around
Both for Cub and for Little Miss, opening an RESP at RBC was simple and painless. You can fill out an online form, call 1-866-233-2736 or visit your local branch to make an appointment. I tend to avoid talking on the phone at all costs (the advent of unlimited, free text messaging has been a real lifesaver for me), but for some reason I called on a Sunday while Cub was out with his Papa (because there’s nothing like Mommy being on the phone to make Cub decide he cannot possibly occupy himself). I made myself nice and comfy:
I’m so glad I did decide to dial, because I spoke to a delightful (seriously) chap called Malcolm (yes, I get to call him “chap” because he was British) who had no idea I was a blogger about to write about RESPs at RBC. I felt like a mystery shopper! (I’ve always wanted to be a mystery shopper, by the way.)
Malcolm helped me update my Investor Profile in my RBC account, which was sorely out of date, and then we chatted about opening an RESP for Little Miss Cub. (All that was missing was a cup of tea!) Malcolm taught me something completely new about RESPs: the existence of a “Family Plan.” Malcolm recommended that rather than opening an individual RESP for Little Miss Cub, I should add her to the one we already had started for Cub!
What’s the deal with a Family RESP?
I had no idea that there was such thing as a Family Plan when it came to RESPs, so maybe I’m not alone. I thought that each child could only have his or her own plan, at the risk of losing the government contribution if ever they chose not to pursue post-secondary education. Nope! As long as the beneficiaries are related, you can pool contributions into one RESP, and, when the time comes, divide up the savings as necessary. If Cub becomes a self-made billionaire at age 19 and goes off to live on his own private island, his sister will be able to use all of the RESP money for her own education. (I figure between now and then, I have enough time to work on Cub’s sharing skills.)
Malcolm set me up for a meeting with Kimberley at my local branch so we could do all the paperwork and talk about how to maximize the earnings in our Family RESP so if both kiddos follow in their parents’ love of academia (or trade school – there are tons of post-secondary programs that are covered) we will have plenty of savings to go around.
Kimberley explained that to contribute to our family plan, for each deposit (automatic or one-time), we designate one recipient, to a maximum of $2500 per year, per child for which the government will kick in 20%. RBC reports the amounts deposited via the children’s Social Insurance Number on a monthly basis and the government money is then deposited directly into the family plan. At that point, the money is added to the pool: at withdrawal time, either child or both will be able to use that government cash, regardless of who was initially designated.
Let RBC Grow Your Money While Your Babies Grow
Currently all of Cub’s RESP money is locked up in term deposits. Why? Because I didn’t talk to a RBC Financial Adviser: I set them up blindly online because I was both lazy and shy about talking to an expert. Lesson learned! At my appointment, Kimberley taught me about RBC investment funds that are specifically designed for people starting their young children’s RESPs for post-secondary goals that are decades away.
Essentially, the portfolio of stocks starts off with higher risk, since higher risk means more earnings potential, and as the post-secondary years approach, RBC automatically scales back the risks and moves the money to more stable revenue sources. Kimberley suggested we choose the RBC Target 2030 Education Fund (this is the document she sent me home to review), which in 2013 grew 17%! The best part about this for me is that RBC takes charge of growing my money and I can focus on my growing children.
Once we have $500 put aside, we can buy into this fund. Subsequently, we can contribute as little as $25 at a time. We plan to set up an RESP-matic, in other words, automatic deductions, because at just $25 a week…
Come Party With Us and Win a $150 Visa Gift Card
RBC is hosting an RESP Twitter Party (so you can come in your pajamas) on September 17th at 9 PM EST. Participants can have all their pressing RESP questions answered, and be entered to win one of six $150 Visa Gift Cards! Be sure to follow the hashtag #RESPwithRBC.
In the meantime, find out everything you need to know about RESPs at RBC on their web page.
Do you have individual or family plans set up for your children?