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You also don’t have control over where the money is invested. Though it should take you an hour or so to set up and fifteen minutes every year to monitor, it is entirely your responsibility to do so.
You lose the earnings on your contributions as well as the matching grants provided by the government.
The longer you have been contributing to a plan, the more important it is that you continue to do so.
First of all, yes, I represent an RESP company, but that doesn’t mean that I have to invest with them for my own family.
I could do something else, while still representing them.
Related: Money Sense article on RESPs; Comments section of Million Dollar Journey’s post on RESPs.
For an overview of how a Group RESP plan works, you can refer to pages 25 to 32 of this prospectus. You should keep in mind that there is no such thing as a free lunch. In a typical plan, you’ll pay an enrolment fee of $200 per unit.
Though I have set up a self-directed RESP for my boys, I had not researched scholarship plans in detail.If money is tight (a job loss or unexpected emergency), you should be able to skip a contribution to the RESP.Your flexibility is limited if you originally signed up for a regular contribution schedule.Also, you’ll derive full benefit from the program only if your child attends a four-year degree program.Returns: You should keep in mind that scholarship plans are invested in low-risk and low-return assets like T-bills, bonds and mortgages.In contrast, you have to keep contributing to a scholarship fund or you lose your membership.