Comments on: How to Open a TD e-Series (e-Funds) RESP Account

By: scott92

scott92 — Thu, 01 Sep 2011 14:32:57 +0000

How do yo link an account from another bank (National Bank) to your e-funds RESP so that you can buy e-series funds? I have recently closed all of my day-to-day TD accounts in favor of a much better package with lower fees and lower line of credit interest rates, but I do not want to give up my TD e-series RESP account.

By: emunster

emunster — Mon, 28 Feb 2011 01:34:29 +0000

@ t bel,
I understand your frustrations, I have been given different answers from TD and Revenue Canada, none of their employees know the rules themselves. Different branches in TD have given me different answers, some say that I can transfer it and some tell me I can’t. If you can find a bank that will allow you to invest the additional grant then I would wait till your investments mature and make the transfer. The clause below from the Canada Education Savings Grant Website may have the answer to whether we can or can’t transfer the funds out to invest in mutual funds. Nobody can give me clarification on it so we gave up. When the time comes we will see if there are any other institutions that allow us to transfer the funds to mutual funds. We have our kids GIC RESP’s invested in a Market Growth GIC that mimicks the stock market and will pay up to 75% at maturity and the worst case we keep our principal amount. We are 2 years into a 5 year GIC and I found out from the bank that it is up 15% in the last 2 years, so it’s up 7.5% per year. I know they aren’t offering more than 50% payout after a 5 year term now. This is the only clause pertaining to our situation which I don’t fully understand and nobody can give me clarification on.

3.2.1. Conditions for an Eligible Transfer of the CESG

Both plans have a common beneficiary.
OR
A beneficiary of the receiving plan is under 21 years of age and is a sibling of a beneficiary in the transferring plan.
AND
The receiving plan is an individual (non-family) plan or a family plan in which all beneficiaries are siblings.
OR
No Additional CESG has been paid into the transferring plan.
AND
The receiving plan complies with all conditions applicable to registering Education Savings Plans (ESPs) since January 1, 1999, as required by the Income Tax Act (ITA).

emunster

By: t bel

t bel — Sun, 27 Feb 2011 03:15:29 +0000

emunster,

We’re in the same situation as you, trying to move money out of a TD Term RESP account and into efunds. I’ve sent the following off to both TD and HRDSC for clarification. If anyone here has any ideas, I’d love to hear them.

“Hello,

We have been using RESPs for 5 years now, starting with CIBC, and then transferring to TD. Initially we were content with investing in GIC’s, but now we would like to invest some of this differently, ideally using TD index mutual funds as we are now more tolerant of risk and the children are still young (5,3 and 1 yrs old).

However, when we inquired last summer at TD about transferring some money out, they threw up a big hurdle. TD’s message was that the money can’t be transferred out of the Term RESP account without having to give back all of the government contributions (CESG, additional CESG and CLB). We have over $10000 in laddered GIC’s, with 20% of the total account maturing this summer, next summer, etc for the next five years. We’d like to transfer some cash to an RESP mutual fund when the GICs mature.

Can you confirm that we will have to return the grant money to the government if we try to transfer cash out of a GIC account? If so, can you explain or direct me to the documentation that explains this rule?

Any ideas or suggestions on how we might move money out of this Term GIC account without losing any of the grants we’ve accumulated?

Thanks for any help you can provide,

t bel”

By: FrugalTrader

FrugalTrader — Sat, 29 Jan 2011 21:55:44 +0000

@Roxanne, we had to open a TD Mutual funds account in branch (free), then print off the paper work online and send it in. They take a little while, but you’ll see the e-series funds available in your account.

By: Roxanne

Roxanne — Sat, 29 Jan 2011 18:09:34 +0000

I just got back from a TD bank in River Heights- Winnipeg and it was a very frustrating experience. I walked out thinking that perhaps I really did not know what I was talking about! I informed the advisor I wished to open the TD e-series account. I informed him there was an online application and wanted to complete it in person so I could just get all the paperwork out of the way. He did not know what I was referring to! I asked him to show me the website and he informed me it looks different than the one I have at home (which it did). I could not find any reference to this application! He then proceeded to tell me I would have to open up a TD Waterhouse Brokerage Account. I told him I did not want to do this! (the account is $100.00/year). He then went on and printed me out information regarding this account. I just took the information and left!!

By: Baalat

Baalat — Sun, 16 Jan 2011 15:50:36 +0000

@emunster @Traciatim: Probably ask them to transfer the money out of the additional grant ($500 per year iirc). Then you will have 2 RESP: one for the additional grant (where you deposit $500/yr) and another with mutual funds.
This strategy is described in the following blog:
http://canadianinvestmentjourney.blogspot.com/2008/12/resp-on-td-e-series-mutual-fund.html
We did this since my wife is not working and she is the ‘main caregiver’ (she is getting the child benefit)

By: Etienne

Etienne — Thu, 18 Nov 2010 13:44:29 +0000

Re: Peter
Yes after you recieve the grant into the money market fund, you can transfer it to an e fund, provided that your account has been converted to e.

By: Peter

Peter — Wed, 17 Nov 2010 18:21:45 +0000

I just opened a TD RESP mutual fund account and during the application process there was an option asking where the CESG should go to when you receive it. Can the grant be used to purchase the e-series funds? I asked them to put it in the money market fund but I do recall reading that the grant can’t be used to purchase e-series funds? If so, where can it be parked? Also how long does it take for the grant to be deposited into the account?

By: Vlad

Vlad — Sun, 24 Oct 2010 15:45:33 +0000

I am in the opposite situation. My son is nearing graduation and I want to transfer the money market portion (~20% of the total account) of the RESP (family plan with 2 beneficiaries – siblings) TD mutual e-funds account into some RESP GICs with TD.

I am planning to create a GIC ladder and increase the GIC portion by transferring from the money market as my son gets close to graduation.
Will I have the same issue as mentioned above. I do not want the transfer to trigger withdrawal and to force me to repay the basic CESG. I have not received any Additional CESG in the RESP mutual funds account.

Anybody knows what is the fee involved in such a transfer and the steps to perform the move?

By: Traciatim

Traciatim — Mon, 11 Oct 2010 17:54:17 +0000

Well, the issue seems to be that the Additional Grant is not offered in the TD Mutual Fund RESP. So anything that was received over and above the regular CESG would have to be repaid. I’m still not sure why TD won’t just do a transfer for you rather than withdraw all the funds and put them in to the new account.

It must come down to the way the rules work around transferring from the TD Canada Trust account which supports the Additional CESG and Canada Learning Bond, and the TD Mutual Fund account which only does the regular CESG and not the other two.

Maybe the best way to proceed is to put future contributions in to the TD Mutual Fund Account and keep rolling the GICs in the Canada Trust Account. You could stick with really short range GICs until rates increase some more.

Either that or maybe transfer to another institution that supports the CESG, Additional CESG, and CLB in a mutual fund account . . . I’m not even sure if any of those exist though.

By: emunster

emunster — Mon, 11 Oct 2010 15:57:54 +0000

The TD PB told me that there are restrictions when transferring an RESP account that qualified for the additional grant. I called someone from the CESG office and she told me that I can transfer the accounts as well as the grants to another RESP provider as long as they allow both grants to be invested in their plans. Not all providers allow the additional grant to be invested in their plans, according to this woman. This woman at the CESG office did tell me that there could be tax implications from Revenue Canada and she gave me a direct line to someone at Revenue Canada. This man from Revenue Canada told me that the woman should know all the rules and that I should call back to the CESG office and speak to a supervisor because they ( CESG office) should know the rules as they are the ones who administer the grant. So right now I am confused and frustrated, everyone passes the buck. I did find this clause on the government website but it is a little confusing to understand.

3.2.1. Conditions for an Eligible Transfer of the CESG

Thanks in advance, I really appreciate your time.

By: Traciatim

Traciatim — Mon, 11 Oct 2010 15:38:18 +0000

emunster, on the TD Canada Trust FAQ they have a question that reads:

“Can I transfer funds between RESPs?

Yes, a transfer between RESPs can be made under certain conditions. Please ask us for details.”

Did they give you a reason why it can’t be transferred? That’s essentially required information to answer your question.

By: emunster

emunster — Mon, 11 Oct 2010 14:51:54 +0000

I opened a family plan a couple of years ago with TD, a GIC account and I received the basic CESG as well as the additional grant. Last year I opened individual RESP accounts for my two children so I can invest in mutual funds. A GIC had come up for renewal last week and the interest rate that was offered was paying only .75% versus the 4% we received so my wife and I decided we would transfer just our principal amount from the GIC that had matured and move it over to the individual mutual fund account. Well let me tell you we were shocked to find out that if we moved it we would have to repay all the grant money as well as pay a penalty because it would trigger a withdrawal. Is this true? TD is telling me that the money has to stay in this account and that I can’t even transfer it. This is a total scam on their part for putting such restrictions. Anyone have any advice as to what my options are? The e- series funds look good to me if I can move it as I trade my own mutual funds myself online.

By: Crustal Movement

Crustal Movement — Thu, 01 Apr 2010 01:50:37 +0000

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.

By: Etienne

Etienne — Fri, 26 Mar 2010 02:23:28 +0000

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.

By: Crustal Movement

Crustal Movement — Sat, 20 Mar 2010 23:24:29 +0000

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.

By: Father of Five

Father of Five — Fri, 17 Apr 2009 07:33:02 +0000

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?

By: Jane

Jane — Wed, 04 Mar 2009 15:52:53 +0000

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?

By: Andy

Andy — Fri, 27 Feb 2009 02:59:43 +0000

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.

By: BOB

BOB — Wed, 11 Feb 2009 22:12:42 +0000

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..