Despite charging some of lowest fees, the TD e-Series mutual funds may not be suitable for everyone because TD Bank RESP accounts are not set up to receive the enhanced Canada Education Savings Grant available for lower income Canadian families. Reader TS who had RESP accounts at TD sent the following note (slightly edited) about moving the accounts to Altamira (posted with permission).

Update on Oct. 12, 2012: Altamira is now owned by National Bank Financial. The contents of this post remains true of the National Bank RESP account as well.

After some initial confusion, I set up one family RESP account for each of my three children with Altamira and added the other two as beneficiaries. The Altamira rep was very helpful with the paperwork and even caught what looked like a mistake on my part in the transfer from TD (it wasn’t a mistake as I had transferred one kid’s amount to another on purpose to make the amounts deposited in the new accounts more proportional to the kids ages), but I was impressed that she caught it.

So overall I was pleased with Altamira, and very happy my kids will be able to receive the additional grants for which we are eligible. We have other business with Altamira and I have been happy with them because although their index fund MERs are a bit higher than TD (most are 0.5% I think), I find their online system, phone system, and monthly reports much easier to read/use. I don’t know what it is with TD as I find their reports much harder to read and track, and when I make trades within my account, it always seems harder than it should be. I know you’ve had good experience with them, and overall I am still pleased, but I am glad that I only have to call them a couple of times a year.

One more thought: Overall the RESP process just doesn’t seem that easy. My local TD banker told me that many people are missing out on all the free government money (here in Alberta each kid is eligible for $500 for just being born!) because they don’t ever set up an account. I am fairly good with numbers and have a decent investment understanding and I still found it a lot of work and confusing, so I think the government isn’t succeeding in getting the money to families who could really use it in the future. I hate seeing people miss out on good things like this. It would be interesting to know how many people do not get the grants for which they are eligible.

This article has 12 comments

  1. I took particular notice to the last sentence:
    “It would be interesting to know how many people do not get the grants for which they are eligible.”

    Grants have to be difficult to get even for those who are eligible. It would be impossible to reasonably fund all grants from public funds if it is easy.

  2. I definitely agree on the byzantine path one must navigate in order to get the grants new parents are entitled to. In my case, I opened a TD Waterhouse self-directed family RESP.

    TD Waterhouse then applied for the CESG (Federal) grant. Only much later, after digging for answers, did I find out that this RESP does “not participate” in the ACESG (Alberta) grant program. For TD, the ACESG can only be accessed using a Term (GIC-only) plan. So now, I’ll have two family RESP plans, one to get the Federal grant and another to get the Alberta grant.

    Also, while I’m generally a fan of TD, their sign-up process when done online or through the mail is ridiculous. It took me over 6 months of back and forth (mails, phone calls, and faxes) just to get the first TD Waterhouse RESP opened and ready to use.

    When dealing with TD, I would strongly recommend developing a relationship with one of their staffers who can run the gauntlet for you on applications. Either that or leave many months of time for the process to happen.

    Even after these hassles, I’m still sticking with TD though. Don’t get me started on Altamira. I dumped them many years ago.

  3. CC: You live in Alberta now?

  4. Canadian Capitalist

    Dave: Nope. I fashioned this post out of a reader email on how he moved to Altamira to take advantage of additional grants.

    Guy Davis: I didn’t have many problems in setting up our RESP accounts with TD Mutual Funds. I would have thought that opening a TDW RESP account would be routine. But then again, RESPs are typically small accounts and are typically neglected by institutions.

  5. How low does your income need to be to get the extra money? Might need to look into this myself.

    yes, setting up the RESP is a ROYAL pain in the article, but well worth the time at the end of it all

  6. I had a very similar experience with setting up a self directed family RESP with TD Waterhouse, only to find out later it doesn’t not support the enhanced savings grant and the canadian learning bond.

    I’m just now in the final step of setting up a family RESP account with Questrade which supports both, and has no annual fee, unlike Waterhouse. The only downside is I will only make 1-2 contributions a year to limit fees instead of using a monthly contribution with eSeries, oh well.

    Anyone have any experience with how long it takes an RESP transfer to go through?

  7. Does anyone have an experience opening an RESP account w/ Credential?? I would be grateful to hear from you.

  8. Hi Jo,

    We have our RESP at Credential, because of their no-fee RESP accounts. I don’t recall ever having any issues with opening or funding the account, and the CESG came through without a hitch.

    When you want to put money into the account, there’s a form to fill out (Form 22). On the form, you designate how much money you want to put in the account and whether you want to apply for the CESG.

  9. Thanks so much Gene. That’s awesome. I’m hoping to start the process for opening an acct this weekend 😉

  10. In my experience, setting up an RESP account and getting the grants is not really a problem. Sometimes there are administrative errors for example a wrong DOB or some other errors in forms submitted for grants which could significantly delay the process……….usually its pretty straightforward. I don’t have any experience with TD though.

  11. Pingback: Investing in TD e-Series Funds for Your RESP | Canadian Capitalist

  12. I just received my son’s SIN card yesterday and he was born a couple of weeks ago. When should I open up his RESP account?

    Also, where would I go to see if he’s eligible for additional CESG grants?