Opening An RESP With Questrade
Shortly after baby girl was born, we applied for her social insurance number immediately with the intention of opening up an RESP account for her. For those that do not know, RESP stands for Registered Education Savings Plan. It is, without a doubt, the best way to save for a child's education. In addition to contributions allowing to grow tax-free within the plan, the Government also provides grants depending on how much is contributed. That's free money! The only downside, the money can only be used for education purposes. There's a lot to cover in an RESP, that can wait for another post. First, we need to cover opening an RESP for your child.
First off, like an RRSP and TFSA, a RESP is only a type of container for your investments. Most people hold their RESP as cash. However, you can also invest the money in GICs, stocks, mutual funds, ETFs, etc. Since baby girl is the daughter of Loonie IT Guy, we choose to open an account at Questrade so we can purchase index ETFs.
After filling in the application online, Questrade provides a handy checklist of things we need to do to complete the application process.
|Checklist of required things.|
The other documents were printed and filled out. There were some tricky parts, here's how to navigate the forms.
|You need to fill this in.|
|Another tricky part. Calculating dates.|
This is the next tricky part. It doesn't look so tricky, though. Right? Seems pretty straightforward. Well, unfortunately, this step has caused headaches for many parents trying to open an RESP. So what's the problem? In section 1, they require information about the subscribers (in our case, the parents). In the check boxes, there's an option to mark if you're the Primary Caregiver.
Don't mark both parents as the Primary Caregiver.
Due to Canada's antiquated laws, there is only ONE primary caregiver and almost always, it is the woman in the household. It doesn't matter if the father has 100% custody, the mother is not in the picture, and the woman of the house is not related to the children*. It doesn't matter if you're a stay-at-home dad. The woman is almost always the primary caregiver.
In our case, I marked myself as No and wifey as Yes for the primary caregiver sections.
The rest of the this section was self explanatory. I also needed to select the number of beneficiaries. As we're only applying for baby girl, I entered 1. However, your situation may be different if you're applying for a family RESP and are added a few children to the plan.
|More information required for the Primary Caregiver|
As far as I could tell, that was all the tricky sections in the RESP application process. Admittedly, we're a simple case. Mother and father applying for an RESP for their one child. The process could be more complex if you're an Aunt or Uncle or Grandparent. It would also be more complex if you're opening a family RESP.
Fortunately, for us, the application process took only a week. Immediately, we started contributions and have already reaped the benefits of the RESP. More on that next time.
*There was a CBC article about this. Essentially, the father was trying to apply for child benefits, but the system stopped and informed him that he required permission from his live-in partner to continue. The Government automatically assumed the father's live in partner was the primary caregiver. Even though she was not the biological mother of the children.