Where to Park a Minor's Savings When Banks Say No

An informal trust, sometimes called a bare trust, is another path. The parent opens a standard non-registered account in their own name, designates the child as a beneficiary, and keeps separate records of contributions and growth. This approach avoids the bank's policy entirely but adds paperwork. The CRA requires the parent to report any income from the account as their own until the child turns 18. For a sum under $10,000 over two years, the tax difference is probably negligible. Running the numbers with the specific contribution schedule is still worth doing.

A Registered Education Savings Plan (RESP) works only if the money is destined for post-secondary school. The government adds a 20% grant on the first $2,500 contributed per year. That subsidy is hard to beat. The catch is the money stays locked in for education. Withdrawing for other purposes before the child turns 18 triggers penalties and grant repayments.

The parent's situation is straightforward: a short time horizon, a small amount, and a desire for simplicity. The discount-broker in-trust account is the cleanest fit. The parent should check that the brokerage supports the chosen ETF and that the account can be set up before the next contribution. The banks may have closed one door. The online brokers have kept it open.