Registered Education Savings Plan - RESP

DEFINITION of 'Registered Education Savings Plan - RESP'

A savings plan sponsored by the Canadian government that encourages investing in a child's future post-secondary education. Subscribers to an RESP make contributions that build up tax-free earnings - tax-free because subscribers cannot deduct payments made to the plan from their income. The government contributes a certain amount to plans for children under 18 under the Canada Education Savings Grant (CESG).

BREAKING DOWN 'Registered Education Savings Plan - RESP'

Payments are made by a contributor (parent) on behalf of a beneficiary (child). Once the child is in a post-secondary institution, he or she will receive educational assistance payments (EAPs). These EAPs count as income for the child (beneficiary). If the beneficiary doesn't receive payments - either by choice of the contributor or because the beneficiary does not attend a post-secondary institution, the contributor will receive the amount in the RESP back tax-free.

RELATED TERMS
  1. Canada Education Savings Grant ...

    A grant from the Government of Canada paid directly into a beneficiary's ...
  2. Accumulated Income Payments - AIP

    Money withdrawn from a Canadian Registered Education Savings ...
  3. Coverdell Education Savings Account ...

    A tax-deferred trust account created by the U.S. government to ...
  4. Child Support

    The monetary payments that are made from one ex-spouse to another ...
  5. Qualified Higher Education Expense

    Expenses such as tuition and tuition related expenses that an ...
  6. 529 Plan

    529 is a category of plans that provide tax advantages when saving ...
Related Articles
  1. Professionals

    College Savings Plans

    FINRA/NASAA Series 26 Section 4 - College Savings Plans. In this section coverdell education savings account (ESA) and section 529 plans.
  2. 529 Plans

    What 529 Plans are: College savings accounts that are exempt from federal taxes. Pros: No income restrictions for contributors; investments grow tax-deferred; distributions are tax-free at the ...
  3. Savings

    529 Plans: Types Of Plans

    By Denise Appleby There are two types of 529 plans: Prepaid tuition programs, which may be offered by the state of an eligible educational institution. Prepaid tuition programs allow ...
  4. Professionals

    Section 529 College Savings Plans

    Series 6, Section 529 College Savings Plans. This section deals with Section 529 Plans and related issues to the 529 plan.
  5. Personal Finance

    Opening Your Child's First Bank Account

    Teach your children to save up to meet their spending - and saving - goals.
  6. Savings

    529 Plans: Distributions

    By Denise ApplebyDistributions from 529 plans used for qualified education expenses are tax- and penalty-free if the amount is equal to or less than the designated beneficiary's qualified ...
  7. Professionals

    Education Savings Vehicles

    Education Savings Vehicles
  8. Professionals

    Education Planning

    Education Planning
  9. Credit & Loans

    Why Ignoring Your 529 Plan Could Cost You Big

    Saving for your kids' college tuition can be difficult. Here's how a 529 plan can help and how you, too, can help your 529 plan.
  10. Professionals

    Coverdell Education Savings Plan

    Series 6, Coverdell Education Savings Plan. This section discusses the Coverdell Educational Savings Plan and related tax issues.
RELATED FAQS
  1. What options do I have to save for my child's education?

    There are numerous options available to invest savings for a child's education: State-sponsored "529" college savings plans: ... Read Answer >>
  2. What are the risks involved in a banker's acceptance?

    Learn about the different kinds of college savings accounts, how they can benefit a college saver and how to open these savings ... Read Answer >>
  3. Can my child have an IRA/Roth IRA?

    Explore the possibilities for establishing a traditional or Roth IRA for a minor child, and learn the necessary requirements, ... Read Answer >>
  4. Can I contribute to both a 529 plan and a Coverdell education savings account?

    You can contribute to both, and when your child is ready to attend college, as colleges do accept payments from both. There ... Read Answer >>
  5. A parent would choose to set up a Coverdell Education Savings Account for a child ...

    A parent would choose to set up a Coverdell Education Savings Account for a child in order to save for college expenses AND: ... Read Answer >>
  6. What is the best way to save for private school expenses? A 529 plan, a Coverdell ...

    If the goal is to put the money in the plan towards private school expenses, then the Coverdell Education Savings Account ... Read Answer >>
Hot Definitions
  1. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  4. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  5. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  6. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
Trading Center