Do some searches online about group RESPs. I wouldn't be entering into any 18 year contract.
Mutual funds, are what bank advisors are pushed to sell, high fees, and generally poor performance on the funds they are pushed to sell. Not to mention your bank advisor will probably change every 18months if not less.
Doing some reading on their site, as I have had a couple clients have these plans in the past..
http://www.cst.org/index.cfm?pagepat...ange_&id=14211
What if things change....devil the in details, your child doesn't go to school, transfer to another child, that's normal. #2 Transfer the income to your RRSP, NOT THE PRINCIPAL. And the income is not going to be a lot since it's mainly invested in gov't bonds.
Implications of Transferring to Another RESP Provider
• We will transfer your Contributions (less enrolment fees, account maintenance fees and a transfer fee) to the other RESP provider (see “Transferring to Another RESP Provider” on page 25)
• Your income will stay in the Plan and be transferred to the Education Assistance Payment Fund to be shared among Beneficiaries who remain in the Plan.
So you lose all your 'growth' and only get whats left of your principal, after they deduct all their fees.
Terminating Your Plan
• You can terminate your Education Savings Plan Agreement at any time by writing to us (see “Terminating Your Plan” on page 25)
• If we receive your written request within 60 days of the date you signed the Application, we will return all your Contributions
• If we receive your written request more than 60 days after the date you signed the Application, we will return your Contributions less enrolment fees and account maintenance fees...
If you wait longer than 60 days, you will owe them money.
Another gem from the prospectus:
Transfer or Termination by Us
Failure to make a required Contribution: If you miss a required Contribution and are unable to make that Contribution within 30 days of receiving written notice that you have missed it, we will automatically transfer you to a Self-determined Plan if:
• you have been enrolled in Group Savings Plan 2001 for at least three years; and
• your Plan has not reached Maturity.
What if You Can’t Make the Required
Contributions?
If you are unable to continue making Contributions in the short term, you should contact us to discuss options that may allow you to continue in the Plan. You must make all Contributions required to complete your Contribution schedule in order for your Beneficiary to be eligible for Education Assistance Payments.
If you don't stick to the contract you will lose your EAP eligibility.
What I'm saying is read the prospectus and understand it. Do your due diligence, remember this is likely a 18 year commitment and there are many other options out there.
Banks will offer RESP accounts: banks can hold mutual funds or GIC's. Brokerages can hold any investments. Group RESP providers will only offer group plans. Insurance agents will offer RESPs as well as Seg funds.
You may want to look into an insurance policy also, this is a strategy that HNW families use. Child won't have the undergo underwriting if they are under a certain age, then when they decide to go to school they can cash in the policy, or not go to school, use the policy for a down payment, or start a business, or just keep it as the premiums are likely all paid up.
Do proper due diligence.