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. These bodies run the RESP program on behalf of all the parents who are a member of it. 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. There are those parents who are complaining about barriers when you want to stop contributing to the program. Another problem is that parent is getting a small amount out of their contribution as a result of the reductions that are being made.
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While it is possible to transfer your savings to a bank or any other, you will have a certain amount of deduction for your contribution. You will also be required to pay an enrollment fee and all transfer charges will be on your side. Other issues that have been raised concern include the lack of transparency on the charges involved, dishonest salespeople, and high rates of interest.
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Although there have been some reforms made in an effort to solve these issues, parents are still complaining. There have been increased complaints from parents as reported by a government agency based in Ottawa. The dealers are responsible for making decisions for parents. The dealers also determine your contribution schedule. In case you fail to contribute on time, your account can be suspended or attract extra fees for every contribution you failed to pay. Some of the fees you will be required to pay, include administration fees, trustee charges, enrollment fees, among other fees. The program doesn’t offer a lot of flexibility. You can’t decide the amount of money you can withdraw and when to do so. A relief to most Canadian parents is that mutual fund dealers and banks have come into a collaboration to provide parents with self-directed plans. With a self-directed plan, you can decide which amount 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. While the government can still give a grant to your child, this money won’t go to their 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 government of Canada introduced RESP group plans to help parents to make savings for their children’s education. There has been a good number of parents who use the program and they have benefited from it. However, with the recent issue with the dealers regulating the program, many parents will be forced to look for alternative ways of managing their savings.

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