Jumpstart your Child’s Education with Questrade RESP
The cost of post-secondary education continues to rise, leaving families with little to no option than to take on student loans.
Even if you won’t be able to fully fund the college cost, an RESP can go a long way in bridging the funding gap and give your kids more options.
In this Questrade RESP review, you’ll learn about the key features of RESPs, how to open an RESP account and start investing at Questrade, and how it compares to some of its competitors.
What is an RESP?
Registered Education Savings Plan (RESP) is a government of Canada program set up to encourage savings for post-secondary education through the various grants.
It is the most popular and arguably the smartest way available for Canadian parents and guardians to start setting aside some money to cover their kids’ post-secondary education cost.
Some of the key features of RESP are:
- Parents/guardians can contribute up to a lifetime limit of $50,000
- The first $2,500 RESP contribution is matched by the government through the Canada Education Savings Grant (CESG). That is free $500 per year for each of your kids – up to a lifetime limit of $7,200.
- Any investment returns made in the account will be tax-sheltered. It will grow and compound tax-free until when you start making withdrawals for your children’s education.
Types of RESPs
There are 3 main types of RESPs.
Individual Plans: opened for one beneficiary
Family Plans: These RESPs are setup for one or more beneficiaries that are related by blood or formally adopted.
Group Plans: They are also known as scholarship plans. The RESP provider manages the plans by pooling and investing the contributions of several children of similar age. Their biggest cons are that they are usually very restrictive and have higher fees than the other 2 types.
Note: Questrade does not offer group plans.
But you can open either an individual or family plan. You’ll get the same RESP benefits irrespective of whichever one you choose.
Individual RESP vs Family RESP
So should you open an individual or family RESP? The choice comes down to personal preference and situation.
Opening a Family RESP can be easier to manage compared to having individual plans for each of your kids. But there are a few drawbacks.
For example, all the beneficiaries of a family RESP must be related by blood or adoption. Also, you need to decide on how to split each contribution you make among the beneficiaries.
If you’re not sure, start with an individual plan. You can always convert it to a family plan if you have more kids.
Questrade RESP Options
Questrade is one of Canada’s most popular online brokerage and the low-cost leader. Investors can invest in many financial products through one of the many account types that it provides, including TFSA, RRSP, RRIF, Margin and RESP accounts.
There are 2 RESP account types at Questrade: Managed and Self-directed Accounts
Irrespective of the account you go with, here are the features of Questrade RESPs.
- Easy online application process
- Automatic application for CESG and Canada Learning Bond (CLB)
- Lower management fees and brokerage commission
- Minimum balance of $1,000 to start investing
Questrade Managed RESP
A managed account is a type of investment account that is managed by a professional investment manager that is appointed by the investor.
By opening a managed RESP account, you effectively give the fund or portfolio manager the authority to make investing decisions on your behalf, according to your objectives and risk appetite.
Usually, the investor’s objectives are determined through a questionnaire at the time of opening the account. Using your responses, you’ll be presented with a recommended portfolio from a number of options with varying risks.
For example, if you have a medium-term goal and moderate portfolio, you may be provided with a balanced portfolio with 60% allocation to stocks and 40% to fixed income securities (bonds).
In exchange for this service, you’ll need to pay a management fees that is calculated based on your portfolio value.
Questrade’s managed RESP is provided under its QuestWealth Portfolio offering. The management fees start at 0.25% for portfolio values below $100,000 but drops to 0.20% if your asset value is higher.
The portfolios are invested in low-cost ETFs with each one having its own Management Expense Ratio (MER). For the Questwealth Portfolio, this will add another 0.13% to the cost of the portfolio.
That brings your total cost for holding the portfolio to 0.38%, which is still a fraction of what you’ll pay to other providers.
Questrade Self-directed RESP
With self-directed accounts, you’re fully in control.
But a self-directed RESP account isn’t for everyone. It requires more involvement and on-going management than a managed RESP.
That is, you need to decide on when to contribute, what to invest in and when, rebalancing the portfolio when necessary and so on. If you don’t have the time or investing knowledge to handle all the decisions you may have to make, a self-directed account can be overwhelming.
With the introduction of “all-in-one” ETFs though, setting up and managing a self-directed RESP has never been easier.
I wrote a detailed post about how to start investing with asset allocation ETFs here.
In my opinion, Questrade has the best self-directed RESP offering in Canada and it ranked highest in overall customer satisfaction according to J.D. Power’s 2020 study.
It lets you buy ETFs commission free and stocks start at 1 cent per share (minimum of $4.95 and capped at $9.95). That means, you can keep your investment cost exceptionally low and limited to just the MER on the ETFs by investing using ETFs only.
Check the post below for a model RESP portfolio you can setup using only one-ticket ETFs.
Related Post: Building A DIY Model RESP Portfolio Using ETFs
Bonus for Questrade Users: One other benefit of opening an account with Questrade is that you get to enjoy the Passiv Elite Member subscription for free – a $99/year value.
Passiv is portfolio management on autopilot. It makes it easy to “build your own personalized index, invest and rebalance with the click of a button, and seamlessly manage multiple accounts”.
Whether you’re managing your portfolio yourself or just want to see all your accounts in one place, Passiv will save you lots of time and effort. You can finally say good bye to those spreadsheets.
Questrade RESP Family Plan
If you have more than one kid, or planning to, a Questrade RESP family plan may be perfect for you.
RESP family plans not only have the same benefits as an individual plan for each kids, they can actually come with less stress and cost especially doing the saving period.
Each child will still receive the $7,200 in lifetime CESG and you can combine your regular contributions and trades. Luckily, you can open an RESP family plan at Questrade.
Opening an RESP at Questrade
Questrade has done a great job of making the online account opening both easy and straight-forward. You’ll be guided through all the forms and documents to complete in a step-by-step way.
The applications for the government grants – CESG and CLB – are also included. Unfortunately, Questrade does not process BTCESG (the one time payment of $1,200 for British Columbia residents).
Once your application is completed and approved, you can fund your account with the minimum balance of $1,000 and start investing.
If you run into any problem or have a question during or after the account opening process, you can get in touch with Questrade customer service through chat or using one of these options: Phone (1-888-783-7866) or Email
Questrade RESP Fees
We touched on Questrade RESP fees earlier, but here’s a summary for each of the account types.
For managed RESP accounts, you’ll need to pay both Questrade’s management fees and the MER of the ETFs.
The total MER for the ETFs will vary depending on which portfolio you invest in, but it is 0.38% for the Questwealth managed account.
There are no management fees for self-directed RESP account. You’ll only pay fees when you buy or sell shares.
The fees start at $4.95 but capped at $9.95. Buying ETFs are commission free.
|Sell ETFs||1 cent per share; min of $4.95 to max. of $9.95|
|Buy or Sell Stocks||1 cent per share; min of $4.95 to max. of $9.95|
Questrade used to charge a quarterly inactivity fee on self-directed accounts but it has been discontinued.
Again, you can keep your investment costs low by only investing using ETFs, especially asset allocation ETFs. That way, you won’t have to incur additional fees if you ever need to sell some assets to rebalance your portfolio.
If you have an RESP account at another brokerage or bank and decide to move it to Questrade, they will cover your transfer fee up to $150 per account.
Questrade RESP Alternatives
There are several RESP providers available to Canadians: from the big banks to robo-advisors and even scholarship plan providers.
For example, the list of RESP promoters on the Employment and Social Development Canada has over 80 financial institutions.
So it’s almost impossible to do a comparison with all the RESP offerings.
Setting up an RESP at one of the big banks is easy and convenient. Some people prefer this because it lets them keep all their accounts in one place.
But the cost of the fund they invest in will generally be higher than what you can get from a robo-advisor like Questwealth Portfolios or WealthSimple.
A popular big bank offering is TD e-series funds and they recently introduced their One-Click Portfolios.
Related Post: RBC RESP Review
Questrade RESP vs WealthSimple RESP
WealthSimple is another popular robo-advisor in Canada, offering many account types including an RESP.
Unlike Questrade that requires a minimum balance of $1,000, you can start investing with as little as $1 in your RESP.
But Wealthsimple as a higher management fee starting at 0.50%.
If you’re interested in opening a self-directed account, there’s Weathsimple Trade that lets you buy and sell securities (ETFs and shares) commission free in a TFSA, RRSP or cash account.
Unfortunately, RESPs are not supported for now.
Questrade will cover the transfer fees if you decide to move your account from another RESP provider up to a limit of $150.
Check this post for my full Wealthsimple RESP Review.
Available Government Grants at Questrade
When you open a Questrade account, you can apply for the following government grants:
- Canada Education Savings Grant (CESG – Both basic and additional)
- Canada Learning Bond (CLB)
- Québec Education Savings Incentive (QESI)
Unfortunately, other provincial education grants like BTCESG for British Columbia, SAGES for Saskatchewan are not available.
Note: Saskatchewan Advantage Grants for Education Savings (SAGES) was temporarily suspended in 2018 until further notice.
Questrade for British Columbia Residents (BTCESG)
If you’re a resident of British Columbia and wish to open a Questrade RESP account, you’ll have to open another account with an RESP provider that administers BTCESG.
BTCESG provides a one-time grant of $1,200 to eligible children when they turn 6 years old.
You can check this list from ESDC for some of the financial institutions you can use.
Wealthsimple is on the list, along with many of the big 5 banks. If you’re going with the big banks, check with them to confirm what you can invest the money in. You don’t want to be forced to invest in mutual funds with high MERs or GICs with low interest rates.
You can decide to open a Questrade RESP now to enjoy the lower fees and more investment options. Then get a second one to receive the $1,200 when your kids turn 6.
Is Questrade safe?
Like the big banks, Questrade is a member of Canadian Investor Protection Fund (CIPF), so all your assets are protected up to $1 million. That means your RESP is protected whether you invest with Questrade or one of the big banks.
The CIPF coverage only covers the market value of your investments if Questrade becomes insolvent. A drop in asset value isn’t covered.
In addition, Questrade’s customers have an additional private insurance of $10 million for extra comfort.
How To Transfer An RESP To Questrade
If you have an existing RESP at another financial institution, you can transfer it to Questrade easily. You should seriously consider this if you’re paying higher fees or the funds are invested in expensive funds.
The first step is to open a new Questrade RESP account. Once the account opening is completed, you can initiate the transfer from Questrade. Simply provide the details of the financial institution and they’ll handle the transfer for you.
If you’re opening a Questwealth Portfolio RESP, your investment in the old RESP will be liquidated and the cash added to your new account.
But you have 2 options if you opened a Questrade self-directed RESP account. The transfer can be “in-kind” where all your holdings are simply transferred to your new Questrade Account.
Or a cash transfer where the investments are sold and the cash moved to Questrade.
The great news is: if you incur any transfer-out fees while transferring an RESP to Questrade, you’ll be reimbursed up to $150.
Questrade RESP Offer Code
You can use this Questrade RESP Offer Code “WALLETBLISS” when you open a new account.
With the code, you can get up to $200 as bonus and transfer fees rebate. Here’s how it works:
- $50 Trade rebate if you open a self-directed RESP at Questrade OR $10,000 managed free for the first year for Questwealth RESP
- Up to $150 Transfer Fee reimbursed to you if you move your investment account from another brokerage and you were charged some transfer-out fees.
Best RESP Plans in Canada
Whether you’re looking for a self-directed or robo-advisor type RESP, there are several RESP plans to choose from in Canada.
Overall, the best RESP plans in Canada based on their features, pricing and convenience are:
- Questrade RESP
- Wealthsimple RESP
- Justwealth RESP
- CI Direct Investing RESP
You can learn more about the best RESP plan providers in Canada here.
Questrade RESP FAQ
You need a minimum of $1,000 to start investing in any of the Questrade RESP options.
The fees vary depending on the type of accounts you choose. Managed accounts have a management fee starting at 0.25% plus the MER of the underlying ETFs the portfolios hold.
Self-directed accounts have no management fees, lets you buy ETFs for free but selling ETFs or trading stocks starts at $4.95 up to a maximum of $9.95.
Yes, RESP subscribers can choose between a Questrade RESP family plan and an individual plan.
Saving for your kids’ education is one of the smart ways to protect your family financially. And the earlier you start the better.
The best part is the free money you get when you contribute. With the government grant on RESPs, you get a guaranteed return of at least 20% on your contributions – or more for lower income families.
So go ahead and open an RESP account for your children today and get the first $10,000 managed for free or a $50 trade rebate using the Questrade offer code “WALLETBLISS” in the link below.
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Also, check this post for some of the best personal finance products and services for Canadians.
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Questrade RESP Review
Questrade RESP is one of the best RESP providers in Canada. Get the offer code to receive a $50 trade deposit or have $10,000 managed for free in the first year.