Tangerine RESP: Is there One? And the Alternatives

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This short post answers the question: Is there a Tangerine RESP?

We’ll then proceed to cover some of the other savings and investment products at Tangerine and some of the alternatives to a Tangerine RESP.

Let’s start…

Does Tangerine have an RESP?

Tangerine does not have an RESP savings or investment product. This may surprise you given that they’ve been around for long and offer other registered accounts like TFSA, RRSP and RRIF.

Though there’s a Tangerine Children’s Savings Account, it is not the same as an RESP Account. With RESP accounts, you get government grants like the Canada Education Savings Grant (CESG) and your contributions grow tax-free.

So if you’re looking to start saving for your children’s education using an RESP, you will have to look elsewhere. We’ll cover some of the best RESP Providers in Canada later in the post.

Tangerine Children’s Savings Account

While the Tangerine Children’s Savings Account is not an RESP equivalent, it could still serve some useful purpose.

Want your kids to learn the importance of savings and being financially literate from a young age? You should consider opening a children’s account for them.

Some of the features of the Tangerine Children’s Savings account include:

  • Competitive interest rate of 1.10%. Higher than the rates on the Big Banks’ kid’s bank accounts.
  • No minimum balance or monthly fees
  • No transaction fees and unlimited transactions

Only parents or legal guardians, that are existing Tangerine clients, can open the account. The kids get their own client number and login to monitor their own savings.

Other Investment Products at Tangerine

Though Tangerine does not offer RESP accounts, you can still open both taxable and registered accounts through one of its several saving and investing products.

  • Savings Accounts: Promo rate of 5.75% for new clients for the first 5 months and 1.00% afterwards.
  • Tangerine Core Portfolios: Mutual-fund products with an MER of 1.06%. Available in 5 different portfolios with varying exposure to equities and a dividend portfolio.
  • Tangerine Global ETF Portfolios: Low-cost investing using exchange traded funds (ETFs) with management fees of 0.65%

Related Posts: Tangerine Global ETF Portfolios Review

Some Tangerine RESP Alternatives and their features

Alternatives to Tangerine RESP

So Tangerine does not offer RESP. What are some of the best RESP providers in Canada to use instead?

In choosing an RESP provider, you should consider:

  1. The type of plans that are available: individual, family or group plans
  2. Account opening minimums and transaction fees
  3. Investment options
  4. Government grants that they offer
  5. Do you want a self-directed or managed (robo-advisor) account?

Below are three of the best places to open an RESP account for your kids at low-cost:

  • Questrade
  • Justwealth
  • Wealthsimple

The 3 RESP plan providers are covered in details below:

1. Questrade RESP

Questrade is a full-service online brokerage. Investors can choose between its robo-advisor offering, Questwealth Portfolios, or open a self-directed account.

Meaning whether you want to build and manage your own RESP portfolio or leave it to their portfolio managers to handle, Questrade has an account for you.

In addition, their managed RESP account has the lowest rate among the robo-advisors. The management fees start at 0.25% for assets below $100,000 and 0.20% for higher deposits.

The Questrade self-directed RESP account also has one of the lowest fees in the industry. Buying ETFs is free but selling ETFs or trading stocks cost a minimum of $4.95 – capped at $9.95.

That means you can build a model RESP portfolio using asset allocation ETFs without paying any commissions. This is important if you’ll be contributing and investing small sums at a time.

A minimum investment amount of $1,000 is needed to start investing.

Wondering how much to contribute to an RESP monthly? Check the linked post.

New clients can get a $50 Trade Rebate or $10,000 managed for free in the first year using the Questrade Offer Code below.

2. JustWealth RESP

Justwealth Education Target Date Portfolios is one of the best RESP investments available for anyone that wants a completely hands-off portfolio.

Target date funds are an innovative investment product that are designed to align a portfolio’s risk with when the investor will need the funds.

The portfolio will start out with higher risk or allocation to equities, but gradually reduce as the maturity date approaches.

If you’re building a portfolio using asset allocation ETFs in a self-directed account, the on-going portfolio maintenance is reduced. But you’ll still have to decide on the right time to scale back the portfolio risk as your kid gets older.

Justwealth handles all of these for you.

There is no minimum account balance, and the management fees starts at 0.50% for deposits below $500,000. Plus 0.20% for the management expense ratio (MER) of the underlying ETFs for a total cost of 0.70%.

Note that there’s a minimum fee of $2.50 for RESPs, so the total fees may well be above 0.70% for smaller account sizes.

3. Wealthsimple RESP

Finally, a Wealthsimple RESP is an alternative to an RESP at Tangerine. Wealthsimple is the largest robo-advisor in Canada with operations in USA and UK.

You can open an RESP with Wealthsimple Invest, its robo-advisor product, but it’s not available yet at Wealthsimple Trade.

There are no minimum opening amounts so you can start investing with as little as $1. And the management fees is 0.50% for deposits below $100,000.

The total fees will range between 0.60% and 0.70% after adding the MER of the underlying ETFs.

Read my full Wealthsimple RESP Review here.

Final Thoughts: Tangerine RESP

You may not be able to open an RESP at Tangerine just yet, but there are several other alternatives available to you.

The 3 RESP providers above are a good place to start. You may also look at the Big Banks’ RESP offerings but be mindful of the investment options.

If the RESP will be invested in mutual funds with high MERs, then look for other low-cost options.

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Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

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