But a Calgary family is warning others about the risks of group RESPs and how a decision to leave their plan early could cost them thousands of dollars.
Hendizadeh, who is an engineer, has been contributing $400 every month to the two plans. His contributions have already climbed to $8,000 — and his daughters, Elika, 4, and Liana, 19 months, are still preschoolers.
What he didn't know is that most of those contributions have been going toward the sales charges for the plans, rather than the actual Registered Education Savings Plan investment.
So, it came as a shock when he inquired about leaving the plan and the amount of money he would get back.
A representative of the foundation told Hendizadeh in an online chat that he would receive only $2,000 if he pulls out.
"This whole sales charge, I came to know about it two weeks ago," said Hendizadeh.
He says he now faces the prospect of losing $6,000 of his investment.
"This $6,000 doesn't make sense to me. I was told to go through the complaint, [the] 1-800 number," he said.
www.cbc.ca/news/canada/calgary/group-resp-warning-fees-1.5257810
