GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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76% - Very Often

Registered Education Savings Plan


Acronyms &
abbreviations:
RESP
Relevant locations:Canada
Notes:RESPs are offered by most financial institutions in Canada.
Filed Under: financial-banking, government, investments, taxation
Tags: academic, investment, taxes
 
Broadly associated with: [Government of Canada]
Narrowly associated with: [Human Resources and Skills Development Canada]

Definition of Registered Education Savings Plan (RESP)

Registered Education Savings Plan (RESP)
1. Education savings plans that grow tax free until a child is ready to pursue a post-secondary education, at which time the money is withdrawn to help finance the costs.


Related Terms and Acronyms:

  • Canada Education Savings Grant (CESG)   Program recently introduced by the federal government whereby it will invest, in the form of grants, along-side parents who save for their children's education through RESPs. The government will top up contributions made to an RESP by 20% up to a yearly maximum of $400 per beneficiary.
  • Canada Learning Bond (CLB)   A grant offered by the Government of Canada to help parents, friends, and family members save early for the post-secondary education of children in modest-income families.
      ➥  See also Canada Education Savings Grant (CESG).
  • Education Savings Plan (ESP)   A savings vehicle used to save for a child's post-secondary education.
      ➥  Offers tax-free earnings.
  • educational assistance payment (EAP)   A payment from an RESP to assist a beneficiary in covering expenses associated with post-secondary education.
  • informal trust   Also known as in-trust account or "bare" trust, this is an investment account registered in an adult's name in trust for a child. The account is used to save/invest funds for a child, and the funds must be reserved for and used by the beneficiary child.
  • Registered Retirement Savings Plan (RRSP)   A savings plan introduced by the federal government to encourage Canadians to save money for retirement. The investment and the interest earned on it is sheltered: it will not be taxed as long as it is left in the plan.
      ➥  Tax deferred investment contribution used to reduce income tax.
  • tax deduction   An expense that governments allow you to subtract from your income before computing your income tax.
  • Tax-Free Savings Account (TFSA)   A savings account for Canadians where income earned is not taxed.
  • tax-sheltered   A savings or investment plan that offers significant tax savings.
  • trust   A fund established like a will, specifying how money or property will be disbursed, lists the recipients or beneficiaries and names one or more trustees to manage the assets. An irrevocable trust can't be changed after the terms are finalized; a revocable trust has more legroom in how much can be transferred, but is usually costlier to maintain.

More Related Terms and Acronyms

  • accumulated income payment (AIP) — Canada, Acronym
  • Canada Education Savings Program (CESP) — Canada, Acronym
  • Child Tax Credit (CTC)Acronym
  • RESP Dealers Association of Canada (RESPDAC) — Company, Canada, Acronym

Broad and Narrow Associations

[Government of Canada]
  • Canada Mortgage Bonds (CMB) — Est. 2001, Canada, Very Important   A fully guaranteed fixed interest rate income investment backed by CMHC (a crown corporation of the Government of Canada).
      ➥  Issued by the Canada Housing Trust (CHT).
  • Registered Retirement Savings Plan (RRSP)Canada, Very Important   A savings plan introduced by the federal government to encourage Canadians to save money for retirement. The investment and the interest earned on it is sheltered: it will not be taxed as long as it is left in the plan.
      ➥  Tax deferred investment contribution used to reduce income tax.
  • Canada Mortgage and Housing Corporation (CMHC)Company Est.1946, Canada-wide, Very Important   The Canada Mortgage and Housing Corporation: this is a Federally run institution that provides banks and lenders with mortgage insurance. Not to be confused with life or property insurance. In the event of default or foreclosure CMHC assumes responsibility of the property and reimburses the bank/lender the entire mortgage amount. This insurance is required generally when you have less than 25% equity or down payment. This insurance is paid by the property owner in advance but usually added to the mortgage amount. See also "G.E. Capital."
      ➥  Insures Canadian mortgage lenders.
  • Home Buyers' Plan (HBP)Canada, Very Important   A way for a homebuyer to use part of his or her RRSP as a down payment on a mortgage.
      ➥  Government assistance for first-time homebuyers.
  • Office of the Superintendent of Financial Institutions (OSFI) — Company, Canada, Important
[Human Resources and Skills Development Canada]
  • Canada Student Loans Program (CSLP) — Canada
      ➥  (Human Resources and Skills Development Canada)
  • human resources and social development canada (HRSDC) — Canada
  • Canada Education Savings Grant (CESG)Canada   Program recently introduced by the federal government whereby it will invest, in the form of grants, along-side parents who save for their children's education through RESPs. The government will top up contributions made to an RESP by 20% up to a yearly maximum of $400 per beneficiary.
  • Canada Learning Bond (CLB) — Canada   A grant offered by the Government of Canada to help parents, friends, and family members save early for the post-secondary education of children in modest-income families.
      ➥  See also Canada Education Savings Grant (CESG).
  • Canada Education Savings Program (CESP) — Canada, Low Relevance

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