TD Mutual Funds

RESP Glossary

Here are some terms you might come across when you're looking into RESPs. If you have additional questions about RESPs, please don't hesitate to call us at 1-800-281-8029 or visit any TD Canada Trust branch.

Beneficiary - This is the child who has been designated to receive the benefit of the RESP. It is important to note that to receive the CESG, this child must be a resident of Canada and must have a Social Insurance Number.

CESG - The Canada Education Savings Grant is a special grant provided by the federal government to help you save for a child's post-secondary education. The CESG is equal to 20% of the first $2,500 you make in annual RESP contributions. That's up to $500 per child each year to a lifetime grant limit of $7,200 per child.

Contributions - This is the money that is deposited into an RESP on behalf of a beneficiary. These funds can be deposited automatically each month or periodically on a lump-sum basis. You can contribute up to a lifetime limit of $50,000 per beneficiary.

Qualifying Educational Program - Currently, to qualify, a program must run three or more consecutive weeks (13 weeks if the institution is outside of Canada) and the student must spend 10 or more hours per week on courses or work in the program. The program must be at the post-secondary level.

Registered Education Savings Plan - A tax-deferred investment plan designed to help save for a child's post-secondary education. Unlike RSPs, contributions made to an RESP are not tax deductible. Any earnings made within the plan from the contributions and grant, along with the grant itself, are taxable to the Beneficiary upon withdrawal for post-secondary educational use.

Subscriber - The Subscriber is the individual who contributes to an RESP for the benefit of a child's education. Depending on the type of RESP, the Subscriber can be a parent, grandparent, aunt, uncle, sibling or friend to the Beneficiary. Joint Subscribers must be spouses or common-law partners according to Canada Customs and Revenue Agency (CCRA).