Toronto-based Wealthsimple has launched a beta version of self-directed Registered Education Savings Plans (RESPs), giving some users the ability to manage their child’s education savings with more control. The company first teased this feature was coming during its ‘Smartest Place to Trade’ livestream back in March.
An RESP is a tax-advantaged account in Canada that helps parents or guardians save money for a child’s post-secondary education, with added government grant contributions.
The new accounts let clients buy and sell stocks and ETFs, including fractional shares, inside a RESP. Previously, RESPs at Wealthsimple could only choose a managed portfolio, meaning it was a robo portfolio set up by the company. More advanced features like options trading, margin, and stock lending aren’t supported yet.
During beta, clients can open family RESPs, either as a single-owner or joint-owner. Each account can have multiple beneficiaries, as long as they’re siblings.
If one child doesn’t attend post-secondary, the money can be used for another sibling. Users can open up to 8 accounts of each type. Individual and adult RESPs are not yet available, but Wealthsimple says they’re coming in the future.
Some Wealthsimple customers selected for the self-directed RESP beta are seeing the following push notification below:
Some limitations apply during the beta testing period. The RESP holder (or their spouse) must be the child’s legal guardian and primary caregiver, and changes to beneficiaries can only be made through the web platform.
Also, clients can transfer cash into the account from a chequing account, TFSA, or an existing managed RESP—with support team help. In-kind transfers, external account transfers, and withdrawals to a bank account are also possible, but must be handled through Wealthsimple support.
Several government grants are supported during beta, including the Canada Education Savings Grant (CESG), the Additional CESG, the Canada Learning Bond (CLB), and the B.C. Training and Education Savings Grant (BCTESG), although the B.C. grant requires contacting support. The Québec Education Savings Incentive (QESI) is not supported at this time.
USD is allowed in single-owner RESPs if the account holder has an active USD subscription, but joint-owner accounts don’t yet support USD. Internal transfers between RESP accounts are allowed, but only after grant payments have been fully received. Wealthsimple recommends waiting six to eight weeks after a deposit before starting any transfer to avoid issues with grant eligibility.
The beta program is not open to all users yet, but Wealthsimple plans to expand access and add more features soon. For now, those interested in using the self-directed RESP or needing help with setup or transfers should reach out to Wealthsimple’s support team.
Earlier this month, Wealthsimple revealed new features coming that it says will allow it to fully replace your bank.
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