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Investing in TD e-Series Funds for Your RESP

November 5, 2007

105 comments

NB: This post was originally published on Nov. 5, 2007. It was extensively edited and updated on Nov. 15, 2012.

I have received a couple of emails that the process of opening a new TD Mutual fund account in order to buy the e-Series index funds described in this post is not very clear. I regret that I did not do a better job of explaining and hope to make the process clearer in this post. As an aside, I would like to point out I have no specific financial interest in writing this post.

Before you begin…

You can open up a Registered Education Savings Plan (RESP) only after you apply for and receive a Social Insurance Number (SIN) card for your child. You can apply for a SIN card at any Service Canada location. Also, you should be aware that a TD Mutual Funds RESP account may not be suitable for everyone because this account is only set up to receive the basic Canada Education Savings Grant (CESG). If your child is eligible for additional CESG, then you may want to explore other options.

Apply for a TD Mutual Funds RESP Account

It is very easy to open a TD e-Series Mutual Fund Account if you are opening a RRSP or Investment account. You simply print out this application form and follow the instructions in the form.

However, opening a TD e-Series RESP account is a slightly more complicated two-step process. First, you have to open a TD Mutual Funds RESP account. You can do so by making an appointment with an advisor at a nearest TD Canada Trust Branch or by mail. You do not have to be a current customer of TD Canada Trust to open a TD Mutual Fund RESP Account. The RESP account will be set up to pull funds from your existing chequing account even if you hold it at a different bank. When you go in to meet a TD Advisor, you’ll need your child’s SIN card and a void cheque for the account from which contributions will be made. If you are making an initial contribution when opening a RESP account for your child, you’ll need to park it in the TD Money Market Fund because e-Series funds are only available online, not through a branch.

Convert RESP account to a TD e-Series Account

After you receive paperwork in the mail that your TD RESP mutual fund account is open, you need to apply to convert it into a TD e-Series Funds account. When the account is successfully converted to an e-Series account, login into EasyWeb with your TD Canada Access card and switch out of the money market fund and invest in a diversified portfolio of e-Series funds according to your asset allocation.

Making future contributions

The next time you want to make a RESP contribution, just click the “Purchase Mutual Funds” link in EasyWeb, select the fund you want to invest in and the amount and click the confirm button. A contribution will be made by pulling it out of the chequing account you provided with your initial application.

CESG Payments

The Canada Education Savings Grant (CESG) will be paid directly into your child’s RESP account. In my experience, the CESG payments appear at the end of the month after which the contribution was made. Example: You made a contribution to your child’s CESG on Jan. 15. The CESG will be paid into the RESP account by the end of February. If you had waited until the end of January, the CESG payments might be delayed until March. If you opted to park your CESG payments in the TD Money Market Fund, do not forget to switch into other funds based on your asset allocation.

Related Resources

How to invest periodically in a TD e-Series Funds RESP Account
A Sample Portfolio Built With TD e-Series Mutual Funds
RESP Primer – Just the Rules You Need to Know

Giving up on Questrade

September 25, 2007

334 comments

Few months back, I moved our investment accounts to Questrade, attracted primarily by their ultra-low commissions and good word-of-mouth recommendations. Everything went smoothly for a while – my account was transferred out without a hitch and trades were executed perfectly – until last week. I logged in to my account and discovered that an interest charge was deducted on our USD account. The interest charge was puzzling because I never trade on margin or short stocks. I thought it was no big deal; mistakes happen and it has happened once before at my previous big bank broker and it took a mere phone call to have the charge reversed.

It turned out that at Questrade it is a big deal. I’ve been contacting them for four straight days asking for an explanation and reversing the interest charge but it’s always one excuse after another. The first day the agent said it is taking time to check my account and he would resolve the matter by the end of the day. The next day, a different agent claimed that “the servers are down” and I would be contacted for sure shortly with an explanation. On the third day, I got the same agent again claiming they were still working on resolving the matter. Today, another agent claimed that someone would have to review my records for each trading day to verify my claim that there was no margin balance (though it took me a four minutes to check; not four days). And on and on it went …

Finally, I had to send an e-mail to Emil Vojkollari, Client Acquisitions Supervisor at Questrade requesting his intervention in this simple matter. Sure enough, within a very short time, a Questrade agent finally contacts me with the information that the interest charge was an error and would be taken care of shortly. Well, why did it take so long?

As a client, my bottom line is very simple: if Questrade made a mistake, it is a simple matter of acknowledging it and reversing the charge immediately; not giving me the run around. Perhaps for $4.95 per trade, you do get what you pay for.