Why Say No To Group Scholarship Plans

1. You can only contribute same or more base on the original agreement, if less, you will have penalties. If you missed payment for one year or more, you will again pay penalty.
2. There are $200 per unit administration fees, you will only get the full refund til the end of the contract.
3. If your children go to school earlier than maturity date, you will lose some money.
4. If your children drop out from post-secondary education, you will also lose some of your money.
5. If you want to terminate the plan, you will lose the administration fees, depends on how many units you have bought. The more money you have contributed to the plan, the more unit you purchase, and therefore the more administration fee there is. (I purchsed about 7 units so far($4000 total contribution) and my penalty is apx. $1400 if I choose to withdraw now).
   For a simple and easy self-directed RESP account, please refer to my previous article “How To Open TD RESP Account”.

Canada Learning Bond

No money to contribute to your kids’ RESP? No problem! If you have Children born after Dec 31, 2003 and making $38,832 or less (family annual net income), and have been receiving National child benefit supplement as part of the Canada child tax benefit(family allowance), just by open up an RESP account(even with zero money in it), Government of Canada will help you to start your education saving by contributing $500 plus $25 to cover the cost of opening the account in initial year, and $100 each of the following year up to age of 15, that’s $2000 of free money! The bond can be used to pay for full time or part time studies in apprenticeship program, a CEGEP, trade school, college or university.

Click on the link to see where you can open up and RESP account:
http://www.hrsdc.gc.ca/eng/learning/education_savings/publicsection/new_promoter_list.shtml

Next I will explain why you should try to open up a self-direct RESP account rather than a group RESP account.