A couple of readers in the RESP Strategy thread requested that I write about my experience opening a TD e-Series/e-Funds RESP account as it seems to be a popular choice for low cost index funds. Canadian Capitalist has already written about this topic, and pretty much sums up what is required. I will include a few more details based on my experience.
To begin, in order open a TD e-Series RESP account, a TD Mutual Funds RESP account is required. This is their “in-house” mutual funds account that most (if not all) of the big banks carry which require no annual fee.
If you don’t already have one, opening a TD Mutual funds RESP account is fairly straight forward. There are two options available which is application either by mail or in branch. We went with the branch option as the mail in form was extremely long.
After the TD Mutual Funds RESP account is setup, the TD e-Series account can be created. This is done by going online and converting the TD Mutual Funds RESP into a TD e-Series RESP by sending in their application form. A few days after they receive the application, the e-Series funds should be accessible online via your account.
Lets get into my personal experience of opening the TD e-Series RESP account. As mentioned above, I decided to go in branch to open the required TD Mutual Funds RESP account. As I don’t have any accounts with TD, I didn’t know what to expect.
As I entered the branch, I was greeted by a friendly receptionist who directed me to a personal banker who has experience with RESP‘s. I mentioned that I was looking to open a TD Mutual Funds account to be converted in an e-Series account. There was some resistance when I mentioned the e-Series account. Even though it is a TD product, it is an online product only, and the personal banker wouldn’t even talk about it. I suspect it’s because they receive no commission or recognition for selling the TD e-Series products. I’m not saying that this is how all the personal bankers from TD would act, this is simply based on my single experience.
As we started the application, the first question was whether or not I was an existing TD customer. I was not at the time, so she mentioned that it would be more convenient to have a chequing account with TD.
The first thought in my head was “uh oh, upsell… monthly fee alert.” So I asked “Why?”
She explained that the only way to get online access to buy/sell mutual funds was through a chequing account tied to a bank card, otherwise, I would have to come in to speak to a personal banker every time I wanted to invest or change funds. From there, the banker showed me their lowest cost bank account ($3.95/mo) which is waived with a minimum balance of $1,000. [edit: the readers have indicated that a TD chequing account is not required]
Even though I really didn’t want to open an additional chequing account (I already have 3) , I decided that in the name of convenience, it would be best to open one. To get around the monthly fee, I will maintain the minimum balance which works out to be the same as a 4.7% annual return.
After opening the new chequing account, we went onto opening a TD RESP Mutual Funds account. This required the standard info sin/address/birth date of parents and child. Along with this, a fairly standard (and quick) investor risk profile questionnaire was required. From there, a cash deposit is made with the option of choosing your funds then and there. Since I was going with the TD e-Series funds later, I decided to park my money in the TD Money Market Fund temporarily.
After the visit, I went online to print off and fill out the TD e-Series application form. Upon mailing the form, it took about 1 week (or less?) to gain access to buying/selling the e-Series funds. From there, I could simply login to my TD account and begin my RESP strategy.
A couple notes: TD didn’t notify me that the e-Series access was ready. I just found that the e-Series funds were available after checking online a week later. Also, since the mutual funds account is already setup, access to those funds remain. The e-Series funds are simply added to the available funds list.