How to Open a TD e-Series (e-Funds) RESP Account
A couple of readers in the RESP Strategy thread requested that I write about my experience opening a TD e-Series/e-Funds RESP account as it seems to be a popular choice for low cost index funds. Canadian Capitalist has already written about this topic, and pretty much sums up what is required. I will include a few more details based on my experience.
The Requirements
To begin, in order open a TD e-Series RESP account, a TD Mutual Funds RESP account is required. This is their “in-house” mutual funds account that most (if not all) of the big banks carry which require no annual fee.
If you don’t already have one, opening a TD Mutual funds RESP account is fairly straight forward. There are two options available which is application either by mail or in branch. We went with the branch option as the mail in form was extremely long.
After the TD Mutual Funds RESP account is setup, the TD e-Series account can be created. This is done by going online and converting the TD Mutual Funds RESP into a TD e-Series RESP by sending in their application form. A few days after they receive the application, the e-Series funds should be accessible online via your account.
My Experience
Lets get into my personal experience of opening the TD e-Series RESP account. As mentioned above, I decided to go in branch to open the required TD Mutual Funds RESP account. As I don’t have any accounts with TD, I didn’t know what to expect.
As I entered the branch, I was greeted by a friendly receptionist who directed me to a personal banker who has experience with RESP’s. I mentioned that I was looking to open a TD Mutual Funds account to be converted in an e-Series account. There was some resistance when I mentioned the e-Series account. Even though it is a TD product, it is an online product only, and the personal banker wouldn’t even talk about it. I suspect it’s because they receive no commission or recognition for selling the TD e-Series products. I’m not saying that this is how all the personal bankers from TD would act, this is simply based on my single experience.
As we started the application, the first question was whether or not I was an existing TD customer. I was not at the time, so she mentioned that it would be more convenient to have a chequing account with TD.
The first thought in my head was “uh oh, upsell… monthly fee alert.” So I asked “Why?”
She explained that the only way to get online access to buy/sell mutual funds was through a chequing account tied to a bank card, otherwise, I would have to come in to speak to a personal banker every time I wanted to invest or change funds. From there, the banker showed me their lowest cost bank account ($3.95/mo) which is waived with a minimum balance of $1,000. [edit: the readers have indicated that a TD chequing account is not required]
Even though I really didn’t want to open an additional chequing account (I already have 3) , I decided that in the name of convenience, it would be best to open one. To get around the monthly fee, I will maintain the minimum balance which works out to be the same as a 4.7% annual return.
After opening the new chequing account, we went onto opening a TD RESP Mutual Funds account. This required the standard info sin/address/birth date of parents and child. Along with this, a fairly standard (and quick) investor risk profile questionnaire was required. From there, a cash deposit is made with the option of choosing your funds then and there. Since I was going with the TD e-Series funds later, I decided to park my money in the TD Money Market Fund temporarily.
After the visit, I went online to print off and fill out the TD e-Series application form. Upon mailing the form, it took about 1 week (or less?) to gain access to buying/selling the e-Series funds. From there, I could simply login to my TD account and begin my RESP strategy.
A couple notes: TD didn’t notify me that the e-Series access was ready. I just found that the e-Series funds were available after checking online a week later. Also, since the mutual funds account is already setup, access to those funds remain. The e-Series funds are simply added to the available funds list.
37 Comments, Comment or Ping
1. Traciatim
“She explained that the only way to get online access to buy/sell mutual funds was through a chequing account tied to a bank card, otherwise, I would have to come in to speak to a personal banker every time I wanted to invest or change funds.”
Are you sure that’s accurate? I don’t have any accounts with TD except for my TD E-Funds RESP for my son and it was never mentioned to me that I would need an actual account to link to. I use EasyWeb all the time to look at the account and move funds around. For deposits I have it linked to my regular CIBC account.
Jun 4th, 2008 @ 8:19 am
2. FrugalTrader
Hmm, that’s what I was afraid of! How did you get online access without a TD bank card number?
Jun 4th, 2008 @ 8:55 am
3. moneygardener
I second Traciatim’s comment. I have no other TD accounts except an online efunds RESP. I just transfer money from a BMO chequing account – it’s very easy.
Jun 4th, 2008 @ 9:55 am
4. Nicolas
Were there any fees to sell the money market fund after holding them for such a short period of time?
Jun 4th, 2008 @ 10:34 am
5. guinness416
Like traciatim, my e-funds account is linked to my CIBC chequing account (no RESP for me though, obviously). I just asked the person at TD to send me a bank card linked to the e-funds account, which they did. I can log in online with its number and see my funds and my mortgage, and make transactions including buying more funds. Works seamlessly.
I will say that I like my experience of the interface and service so much that I’m thinking of switching chequing anyway.
Jun 4th, 2008 @ 10:45 am
6. FrugalTrader
It appears that I have been tricked! I agree with you guinness that their interface is pretty good.
Nicolas, I wondered the same thing as it states that there might be fees for switching out out of the money market fund. However, I have been told by other users of the td e-series that there are no fees involved.
Jun 4th, 2008 @ 11:33 am
7. Canadian Capitalist
Thanks for the link. I don’t have a TD chequing account either. All my bank accounts are with RBC.
Jun 4th, 2008 @ 11:57 am
8. Al
I set up a regular RESP mutual fund account, and was steered into one of the higher MER funds. I’ll be doing this conversion soonest.
FT, if you redeem a normal TD mutual fund within 30 days of the purchase you pay a 2% fee. The 2% is only based on the value of funds purchased within the 30 day window, not the entire balance of the fund. The e-funds have a redemption fee within 90 days.
Jun 4th, 2008 @ 12:28 pm
9. Chuck
We’ve been happy eFunds RESP holders for a couple of years. I bank with TD, and only deal with a PB when I have to because they’re constantly trying to upsell you.
You’re correct that the PBs are not comped on the e-series funds.
Jun 4th, 2008 @ 12:31 pm
10. Traciatim
To mirror what others have said. I believe it was after I sent them in the forms to do the switch to the E-Funds they sent me a letter with a card and account number attached so thatI could log in to Easy Web even though no actual day to day banking account existed with TD.
Jun 4th, 2008 @ 12:36 pm
11. cannon_fodder
Based on Canadian Capitalist’s post http://www.canadiancapitalist.com/2007/11/05/investing-in-td-e-series-funds-for-your-resp it seems that TD still has not addressed the issue of honouring CESG from the government.
This, to me, is a huge factor and should be weighed when considering this structure.
Am I missing something because this item should be given its due attention?
Jun 4th, 2008 @ 12:42 pm
12. FrugalTrader
cannon, I don’t think that there’s a problem with the whole CESG, but with the “bonus” CESG for those with under 76k in income. I should have read CC’s comments thread more thoroughly before signing up with TD. :)
Jun 4th, 2008 @ 1:02 pm
13. Four Pillars
There should never be any fees for switching out of a money market fund – short term trading is the whole point of why they exist.
Jun 4th, 2008 @ 3:18 pm
14. FrugalTrader
That is confirmed, there are no apparent fees for switching out of money market funds with TD with less than 30 days holding time.
Jun 4th, 2008 @ 3:37 pm
15. The Financial Blogger
FT,
I don’t know much about TD e-Series but why can’t you just get them through a regular brokerage account like any other funds? Or can you have them through a broker?
It would have save you time and money, isn’t?
Jun 5th, 2008 @ 7:17 am
16. FrugalTrader
FB, I wish that was the case, but the TD e-Series are exclusive to TD.
Jun 5th, 2008 @ 7:50 am
17. cannon_fodder
FT,
So, if you are looking to get that 20% up to $500 per year, regardless of income, the TD RESP is not a problem?
FB,
If I’m TD, and I have a good thing going such as this low MER e-series funds, do I offer them to everyone OR do I make you sign up at TD in order to purchase them and then work on you to sell you more and more of anything?
If I do the former, then perhaps all that would happen is the mutual fund companies would respond by lowering to my level of MER and I’d lose my advantage. If I do the latter, I have a great chance to convert you into a higher value (i.e. more wallet share) client regardless of whether you buy more of my TD mutual funds for your RESP, RRSP, TFSA, non-registered account. Perhaps you get a credit card, banking account, mortgage.
Just a theory as to the method of their ‘madness’.
Jun 5th, 2008 @ 8:01 am
18. FrugalTrader
cannon, TD RESP should have no problem giving you up to $500/year in CESG. I deposited $2500 fully expecting my 20% CESG in the near future. I will keep you guys posted.
Jun 5th, 2008 @ 8:39 am
19. ETF Income
Yes, I have been using TD e-series since it was incepted. I have quite a few e-series including canadian index, candian e-bonds, us e-series and europe e-series. They all done very well.
Jun 5th, 2008 @ 12:37 pm
20. Mark
You could have just opened a small personal line of credit with TD, and used that account to link to the TD eFunds account. Personal Line of Credit = no monthly fee, no minimum balance. And you only pay interest on what you borrow.
Jun 6th, 2008 @ 12:25 am
21. FrugalTrader
Mark, I asked the same banker about opening a personal line of credit to fund the mutual funds account, and he said that it would be leverage and that it’s not allowed. I’m thinking that I should look into working with another banker instead. :)
Jun 6th, 2008 @ 8:55 am
22. Peter
Hi,
I also opened a TD e-Series account and have nothing but praise for their low fees and easy online interface. When I opened my account I just went to my local branch and asked to open a regular mutual fund account and did not mention the e-Series. Getting all the paperwork done in branch is much easier and faster than mailing in for a new account. Just park your money in a no fee money market fund, go home and fill out the e-Series paperwork, put it in an envelope and bring it back to the same branch to put in inter-office mail. :-)
Jun 8th, 2008 @ 11:58 pm
23. Kevin
Hey all,
I went into TD today to open up an RRSP account w/ TD e-Funds. The person I talked to said I could only by e-Funds through TD Waterhouse. I’d prefer not to do that due to the extra fees. Based on what I’ve been reading on this blog, it doesn’t seem like that’s true – can someone confirm? I realise this blog post is about RESPs, not RRSPs, but I assume there isn’t a difference for the question I’m asking.
Thanks!
Jul 25th, 2008 @ 8:34 pm
24. Tony Zhou
My RESP experience
http://canadianinvestmentjourney.blogspot.com/2008/12/resp-on-td-e-series-mutual-fund.html
Dec 5th, 2008 @ 1:53 pm
25. Vishnu Gandhi
I opened TD mutual fund RESP account for my son in branch. My experience with personal banker was much better compare to RBC where I have my all other accounts. Few days later I requested for online access which I was immediately given and it works fine for additional purchase and transfer of fund. There was no other requirement like having chequing account etc. My Son is 16 year old so this is much better than other RESP Schemes
Jan 3rd, 2009 @ 5:18 pm
26. Aolis
“I will maintain the minimum balance which works out to be the same as a 4.7% annual return”
Not paying for something you don’t need is not a return.
Jan 7th, 2009 @ 4:50 pm
27. newbie
Is there any admin fee for the e-funds RRSP account?
Jan 16th, 2009 @ 5:44 pm
28. Xing
With the TD accounts, how long after does the 20% from the government get put in? Is it just a one time thing at year end or does something get added for every contribution.
Jan 27th, 2009 @ 11:37 am
29. Jert
Xing: I opened my efunds RESP account on December 1st. The rep told me that the government contributions are added after each deposit, but then it was applied on January 2nd … so I don’t really know. Assuming the rep was correct, I’d say it takes about a month to deposit the CESG grant.
Feb 2nd, 2009 @ 12:50 am
30. StellarGoods
Having just had a son close to 1.5 months ago, I am buckling down and choosing my RESP provider for the next 20 or so years. My top 2 picks were TD and RBC. Although TD does indeed have lower MER’s with its E-Series funds, upon closer examination, RBC’s index funds for Canadian Equity and Canadian Bond have both consistently demonstrated higher returns over YTD, 1 yr, 3 yr, 5 yr, and earlier. This is hard to explain given these funds are all supposed to track the same indexes. Tracking error ?!?Having been a loyal RBC client since birth, in Quebec, I will stick to RBC for the RESP’s (although I must admit that RBC probably is the most expensive bank for consumers). As a sidenote, I will offer this information, the Quebec Incentive Education plan which is equal to half of the CESG, meaning 10% of member contributions will apply to both RBC and TD plans when it materializes. RBC gave me the assurance that the provincial grants would be retroactive to Jan 1, 2008 (must confirm) however growth-free. In case anyone wants to verify my info : Bond : TDB909 vs. RBF563
and Canadian Equity : TDB900 vs. RBF556. Comments…
Feb 11th, 2009 @ 2:40 pm
31. BOB
1)what documents are needed to open td Resp….apart from the child’s Sin number..do they need birth certificates..
2)as discussed the problem with Td mutual fund resp is..we do not
get the additional CESG on the first $500 & we also do not get the CLB.
but i believe some branches work them out..open a regular RESP..contribute & then swicth to mutual fund…while the original contribution gets all the grants….does any one any such pleasant experiences..
Feb 11th, 2009 @ 6:42 pm
32. Andy
Just a note to all you who have a problem with TD e-series when you go into a branch and speak to someone. It’s not that the PBs don’t know what you’re talking about, but it’s the point of the funds. The e-funds index funds are the exact same fund as their I-series namesake. The I-series has a higher MER, but you get PB support and advice for that higher MER, so the whole point of the e-series is you don’t want that support, so you don’t pay for it. My point is, it would defeat the purpose if they answered your questions regarding e-series. It’s better not to mention it, go in, create your account, download and mail in the conversion to e-funds and away you go.
Feb 26th, 2009 @ 11:29 pm
33. Jane
I just went open up a td mutual fund RESP account yesterday. The rep told me that all 3 government grants(if I qualify) will go directly to the 5-yr GIC account which has 4% return, it sounded very good to me. When I asked if I could set up 2nd beneficiary so that in case if the primary kid is not going to school, I can transfer the RESP to another child, but they told me there is no such option unless I open up a family plan. Is it true?
Mar 4th, 2009 @ 12:22 pm
34. Father of Five
How exactly does one “link” the TD e-series account to a non-TD bank account like a CIBC chequing account? Do you setup the TD account as a bill to be paid via online banking, or somehow do a money transfer? I enquired of a CIBC person and they said I would probably need to do an “email money transfer” via online banking, and that there is a charge for this transfer? How do others do it?
Apr 17th, 2009 @ 5:03 am
35. Crustal Movement
More than a year ago, I was searching for a self-directed RESP account, when I read this article and decided to follow it with opening a TD e-series account. At that time I was abroad, so I requested the mail-in form, and TD sent me the papers for opening a TD Waterhouse account. I didn’t proceed further, as I needed the TD Mutual Fund account.
Three days ago my wife and me have opened a TD Mutual Fund joint account, family RESP plan. The PB was very polite and didn’t show any concern that I wanted to switch it to an e-Series account. Because my wife is a TD customer, the account was enabled in EasyWeb in two days. For me (I am a BMO customer) the PB collected quite a few personal information, which I didn’t like. The PB also didn’t tell me about the limitations related to CSEG, etc. I am going to apply for conversion next week and I am going to request (with the same conversion form) TD to link the RESP account to my BMO account so that I can contribute too.
A note related to Jane’s posting – I was explained that TD offer three types of investment accounts – GIC, TD Mutual Funds and TD Watrerhouse ones.
It is not possible to open only Mutual Funds account and to invest in GIC, if you do not have a GIC account openened.
Mar 20th, 2010 @ 8:54 pm
36. Etienne
Anybody know where the form is to add another child to an existing TD Mutual Funds RESP ? I have an ‘e’ account, so I cannot get help from the bank, I have to find the form myself.
Mar 25th, 2010 @ 11:53 pm
37. Crustal Movement
Etienne, I think that an account, including the “family plan” account, covers one child only. That is why the account is linked to the SIN. One child (i.e. SIN) may have more than one RESP account.
Mar 31st, 2010 @ 11:20 pm
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