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RESP in Canada–The Challenges that Parents Are Facing Since the Canadian government introduced the RESP Group plans, many parents have considered utilizing the program. RESP Group plans are controlled by organizations such as the Heritage Education Funds and USC. The bodies represent the parents who are members of the RESP Group plans. Although the program has done a lot in helping parents save for their children’s’ education, there are some few complaints from parents who have been using it. Some parents have complained that they are facing a lot of barriers when they want to stop making a contribution to the program. Another issue is the sharp reduction that is imposed in the amount you receive in the end.
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The program can allow you transfer funds to other places, but you will incur a lot of charges for doing that. You will also be required to pay an enrollment fee and all transfer charges will be on your side. Some of the other areas that parents have complained about include dishonesty of the salespeople, hidden charges, and high rate of interest.
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Parents are still having problems despite the changes that have been made. A government agency said that they are still getting a lot of complaints from parents. These dealers are the one who makes the decisions for all members of the program. They also give you the contribution schedule that you should follow. The program requires parents to pay extra fee if they miss to contribute on time and there are instances when your account can be terminated. You will be required to pay enrollment fee, trustee fee, and other charges. The program doesn’t offer a lot of flexibility. You will be limited in the amount you can withdraw, and when you can do the withdrawal. Parents now have a better plan that has been formed by mutual fund dealers in collaboration with banks. With this plan, you can control the amount you wish to contribute and the kind of investment you want. The main advantage of the self-directed plan is that you can get your contribution at any given time. Your child will still get the grants provided by the government but this grant won’t be sent to pay school fees. Although mutual fund dealers have certain charges, but the amount of fee reduces with time and get lifted after seven years. This is a benefit as you will save for your child’s education with no charges involved. The RESP program was formed by the Canadian government to help parents save for their children’s education. There are many members of this program who have received benefits from it. But with the high number of parents complaining about the dealers controlling the program, there are high chances that many parents will opt out of the program.