This article came out back in 2011 when I was depositing money into my kids’ RESPs. I didn’t understand that the Canada Learning Bond eligibility that the TD rep mentioned did not apply to me. My family income was far too high.
Another thing I learned when I went in for my yearly RESP Fun and Games was that to figure out Canada Learning Bond eligibility for my son, I had to open yet another RESP account (with TD) and that account had to be a GIC account.
First, go read about the Canada Learning Bond over at the HDSRC website to find out if you can apply for this grant. My son is born late enough to qualify, and I receive the Canada Child Benefit (CCB) (for now), and those are the two primary criteria to be able to even apply for the grant.
Since I was at my TD branch attempting to extricate money from existing RESPs, I decided to ask about the CLB for my son. Yes, the rep had heard about this program; however, at TD, there is yet another exciting wrinkle added to the equation (interesting because it is a wrinkle that causes me to get wrinkles, recursive), I must open a separate RESP account, and the account is a GIC only account.
This is TD’s view of the Canada Learning Bond. However, to get the CLB, I had to open a separate Family Term RESP account, which only allows me to purchase GICs to get the CLB. Now I don’t have a big issue with this (except that another two trees died printing out various forms to create the account), but I have to wonder out loud why?
Was this a clever ploy by the rep I was dealing with to have me open yet another account (and possibly get her a bonus)? Maybe, I don’t think this sounds hair-brained enough to be a bank policy, but if anyone knows of a possible explanation for why this was so, I would love to hear it.
Epilogue: No, the account showed my son had no Canada Learning Bond Eligibility, and now I have a GIC RESP account with zero balance.
More on Canada Learning Bond
- Pro Literacy did a guest post about RESP’s in general and CLB’s in specifc.
- Sometimes Putting Money into an RESP doesn’t make sense, but with the CLB still open an RESP.
- I have written about the Canada Learning Bond before.
- Canada Learning Bond Frustrations really was me being silly enough to believe I made so little that my kids would get the CLB.
- Are RESPs only for Rich Folk ? Banks certainly think that is the case
- Plenty of other articles about the world of the Registered Education Savings Plan
Governments (Federal, Quebec, Alberta and soon Saskatchewan) have grant programs to assist lower income families with their RESP. TD Canada Trust has restrictions regarding these grants (punitive IMO), that are far more restrictive than the other Banks. TD Canada Trust mandates these grant moneys be placed into a TERM GIC account, whereas the other banks allow the RESP Subscriber to choose which investments (Mutual Funds, Bonds, etc) they wish to place these funds into.
If you want your RESP invested in mutual funds, if you want to receive Government Grants that are available (beyond the CESG), and, do not want a RESP account plus a Term GIC account (yes, two accounts!), look at either Royal Bank of Canada, Scotia Bank, CIBC or Bank of Montreal and not TD Canada Trust!
TD Canada Trust’s policy dictates that if you wish to receive Government Grants such as the a-CESG, the Canadian Learning Bond, Quebec Education Savings Incentive, or the Alberta Centennial Education Savings Grant, they will only process the applications if the funds from these Grants are placed into a Term GIC. And, these funds cannot ever be rolled into your mutual fund RESP or transferred.
Yup, I fell for that one, unfortunately, and I note I haven’t even received those grants either, so now I have an empty GIC account… sigh.