Finance, Investing, Personal, Stock Market

Questrade RESP Review 2023

As a parent, you want to do everything possible to educate your children for a brighter future. One great way to achieve these is by leveraging RESPs. 

A Registered Education Savings Plan (RESP) is a financial product designed by the government to help you save for a child’s post-secondary education. 

Questrade is a Canadian online brokerage that offers self-directed and managed RESP accounts, allowing you to maximize the RESP account of your children through investment returns.

In this Questrade RESP review, we explore what Questrade has to offer on its self-directed and managed investment platforms.

Photo credit: Anthony 🙂

What is an RESP?

RESP stands for Registered Education Savings Plan. It’s a tax-free investment account that’s designed to help you save towards your children’s tertiary education. 

Savings and investments with RESP accounts are tax-free until your child makes withdrawals. Annually, the federal government provides a yearly contribution of up to $500 per child, up to a maximum of $7,200 per child, to encourage saving for education.

Parents, grandparents, family members, or friends, can open an RESP account on behalf of a child.

Keep reading to learn more about the various types of RESP accounts out there. 

3 Types of RESPs

There are three types of RESPs available: individual plan, family plan, and group plan. Note that Questrade offers only individual and family plans. 

Here are a few things to note about these plans;  

  • Individual plan: Only one beneficiary can use this plan. If you have one child, this plan could be the best for you. An Individual RESP is also a good option if you’re an aunt or uncle looking to save for your niece or nephew’s education.
  • Family plan: These RESPs are designed for two or more beneficiaries related by blood or formal adoption. Opening a Family RESP account may be the better choice if you have multiple children
  • Group/Scholarship plan: This is a  type of RESP in which the provider pools and invests the contributions of several children of similar age. One disadvantage of group plans is that they tend to be very restrictive and have higher fees than other types of RESPs.  

Ways to Invest in Questrade RESPs

Questrade allows you to invest in RESP through a managed platform or self-directed platform. The option you choose will depend on your investment skills and knowledge.

The following is an overview of the two RESP investment platforms on Questrade.

Managed RESP 

With a managed RESP account, you give Questrade robo-advisor (Questwealth Portfolios) the authority to make investment decisions based on your objectives and risk tolerance. 

Your objectives are identified through a questionnaire you must fill out when opening the account. 

Based on your responses, the portfolio manager will recommend an ETF portfolio that suits your investment goals and risk tolerance.

In exchange for this service, the robo-advisor will charge you an annual management fee. The Questwealth Portfolios managed fee ranges from 0.20% to 0.25% depending on the balance of your assets.

On the other hand, the providers of ETFs on Questwealth Portfolios charge an annual management expense ratio (MER) for operating the funds. Below is a breakdown of Questwealth Portfolios MER:

  • 0.17% to 0.22% on ETF portfolios
  • 0.21%-0.35% on Socially Responsible Investing (SRI)  portfolios

Self-Directed RESP

The second way of investing in Questrade RESP is through its self-directed brokerage which is called Questrade.

The Questrade self-directed brokerage allows you to take full control of your RESP investing, reducing investment costs.

Interestingly, Questrade waives commissions on buying ETFs. There’s a $1c/share commission on selling ETFs and trading other securities. The following are other securities you can trade on Questrade:

  • Stocks
  • Bonds
  • GICs
  • CFDs
  • FX
  • IPOs
  • Mutual funds
  • Precious metals
  • Foreign equities

The Questrade self-directed brokerage could be suitable for you if you have sufficient knowledge about the stock market and can pick and invest in securities without external intervention.

How to Open an RESP Account at Questrade

Before opening an RESP account at Questrade, you need to first determine which of the above two investment platforms to choose.

After that, you can visit the sign-up page here, click on your favourite investment platform and initiate the registration process.

The process of opening an RESP account varies between the self-directed and managed investment platforms of Questrade. This is expected since the two platforms work differently.

For the self-directed brokerage, all you need is to visit the account page and click on the “Self-directed” option. You will then be required to select  “Education” and the type of RESP account you want to open. Click the “Open Now” button to begin the process

And if you’re looking to invest in Questrade RESP through a managed account, you need to click on “Questwealth” under the account page and then press the “Open Now” button to begin the registration.

Note that there’s a $1,000 minimum investment requirement on both Questrade managed investing platform and the self-directed platform. 

Available Government Grants on Questrade RESP

With Questrade RESP, you can access the following government grants:

  • Canada Education Savings Grant (CESG – Both basic and additional)
  • Canada Learning Bond (CLB)
  • Québec Education Savings Incentive (QESI)

Note that Questrade RESP doesn’t offer access to other provincial education grants like BTCESG for British Columbia.

Is Investment Safe with Questrade?

Your investment and personal data are both secured on Questrade investment platforms.

Questrade is a member of the Canadian Investor Protection Fund (CIPF), which protects customers’ assets up to $1 million in case the company becomes insolvent. 

Also, Questrade offers its customers additional insurance of $10 million for added security.

In addition, the investment platform is regulated by the Investment Industry Organization of Canada (IIROC). 

If you have an unauthorized withdrawal on your Questrade account, the company will reimburse you 100%

How to Transfer an RESP To Questrade

If you are paying higher fees or your fund is invested in expensive funds, you should consider moving your existing RESP to Questrade. 

To start the process, open a new Questrade RESP account. Then, provide the details of the financial institution to Questrade, and they will handle the transfer for you.

 If you are opening a Questwealth Portfolio RESP, your investments in the old account will be sold, and the cash will be added to your new account.

If you are opening a Questrade self-directed RESP account, you can transfer your holdings “in-kind” or through a cash transfer, where the investments are sold, and the cash is moved to Questrade. 

Questrade RESP vs Wealthsimple RESP vs Justwealth RESP

Questrade is just one out of the over 80 RESP providers in Canada. 

In the following table, we shall see how Questrade RESP compares with the RESP accounts of Wealthsimple and Justwealth.

ProfileQuestrade RESPWealthsimple RESPJustwealth RESP
Available investment platformsSelf-directed brokerage and managed platform Managed platformManaged platform
RESP portfoliosETF and SRI portfoliosETF, SRI and Halal portfoliosRESP Target Date Portfolios
Types of RESP accounts Individual and family RESPsIndividual and family RESPsIndividual and family RESPs
Minimum investment$1,000NoneNone
Management fee0.20% to  0.25%0.4% to 0.5%0.4% to 0.5%
ETF MER0.17% to 0.22% 0.12% to 0.15% 0.20% on average
Withdrawal fees$0$0$0
Full account transfer fee$150 $150 $150

It’s clear from the above comparison that Questrade competes significantly with some of the best RESP providers out there. 

Questrade outshines Wealthsimple and Justwealth RESPs in terms of low management fees and MERs on managed investing platforms.

In addition, Questrade allows you to invest in RESP using a self-directed or managed investing platform.

On the other hand, Wealthsimple and Justwealth outshine Questrade in terms of minimum investment requirements. The two platforms don’t require a minimum balance on their RESPs while Questrade requires $1,000.

A careful view of the table shows that Justwealth is the overall winner as it has a dedicated RESP portfolio known as “RESP Target Date Portfolios”. This makes Justwealth a specialized RESP robo-advisor in Canada. 

Read More:

Choosing the Best RESP Provider in Canada

As seen earlier, many RESP providers exist in Canada. Before choosing an RESP provider, ask the following questions. 

  • Is there access to the Canada Learning Bond (CLB)?
  • Is there an additional Canada Education Savings Grant
  • Are there provincial education savings incentives? Are they offered?
  • What are the types of  RESP available?:
  • Can I change to another product while having an RESP?
  • What are the applicable fees?
  • Are there regular payment requirements?
  • What happens if you can no longer make regular payments?
  • How do I transfer money to another type of RESP or registered investment product?

This review has answered most of the above questions for Questrade RESP. Answers to the above questions should form the basis of your final decision.

Verdict on Questrade RESP Review

By contributing to a Registered Education Savings Plan (RESP), you can receive a government grant of up to 20% or more of your contributions depending on your family income.

Questrade provides different ways to save for your children’s post-secondary education through RESP.

Whether you’re investing through the Questrade self-directed brokerage or managed platform, it’s essential to understand what you’re getting into before starting.

To make informed decisions, you should compare Questrade with other RESP providers such as Justwealth and Wealthsimple. Your selection should be informed by the answers to the above questions.

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About John Adebisi

John Adebisi is a CPA, FCCA and MBA holder with a Bachelor's degree in Accounting & Finance. He has over a decade of experience in writing personal and business finance content for audiences across North America, Europe, the UK and Africa. In addition to his writing experience, he also has a strong background in financial research and analysis, giving him a unique perspective of the financial markets. John derives pleasure in helping people make smart financial decisions, and he believes that knowledge and experience can be valuable resources for anyone who wants to learn how to manage their money.

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