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A registered plan by the Canadian government designed to help parent and family members save towards a child’s education fees and expenses in college. These savings are tax-free and individuals can get additional funds if they are eligible through the Canada Learning Bond or Canada Educational Savings Grant (CESG). There two types of RESP’s, individual plans and family plans.
A Registered Education Savings Plan – or RESP – is a special savings account designed to pay for a child’s post-secondary education in Canada. A registered education savings plan is a relatively simple way for Canadian parents to save for their child’s education. Under a registered education savings plan the Canadian government will contribute a 20% bonus on the first $2,000 placed into a registered education savings plan account. In addition, the Canadian government provides several important tax breaks for contributions to a registered education savings plan, although there are penalties for early withdrawl from a registered education savings plan account. Provisions are made for withdrawl from a registered education savings plan if the student does not qualify for post-secondary education. Through a combination of tax-deferrments and lower tax rates on withdrawl, a registered education savings plan is a helpful vehicle for many families struggling to pay for college expenses.
RESP
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This glossary post was last updated: 21st November, 2021 | 0 Views.