Saving and Investing › Glossary



Annual Minimum Payment (AMP) -The federal government requires that holders of Retirement Income Funds (RIFs) withdraw a minimum amount of retirement income from their RIFs each year. The AMP is calculated as a percentage of the plan balance at the beginning of the year based on the planholder's year of birth. If the planholder has a spouse or common law partner, that individual's year of birth can be used instead.


Beneficiary - The person who has been designated to receive the benefit of account or investment.


Canada Pension Plan (CPP) - The Canada Pension Plan is a "contributory" plan. This means that all costs are covered by the financial contributions paid into the Plan by employees, their employers and self-employed people, and from interest earned on the investment of that money. The Canada Pension Plan is not funded through general tax revenues. For more information visit

Carry-forward - If you don't contribute the maximum allowable to your RSP in any year, you can carry the unused portion forward indefinitely. Any amounts "carried forward" should be reflected in the statement provided by CRA with your "Notice of Assessment".

Cashability - This refers to the ability to redeem your guaranteed investment for cash at your convenience and withdraw funds before the original maturity date.

Contributions - The money that is deposited into the account.

Contribution deadline - You have until March 1 (or February 29 in a leap year) to contribute to your RSP and count the contribution as a deduction against eith your previous or current year's income. Once this date has passed, RSP contributions are only deductible against your taxable income for the current (or any subsequent) year. (Please note: when March 1 or February 29 falls on a weekend, the deadline may be extended to the following Monday.)


Family Beneficiary Plan - An RESP with more than one child as beneficiary, but the children must be related to the subscriber by birth or adoption.

Federal Pension Tax Credit - The first $2,000 of pension income (including earnings from retirement income plans) is eligible for a federal tax credit for annuitants aged 65 or older.


Guaranteed Income Supplement (GIS) - The percentage of gross income required to cover monthly payments associated with housing costs. Most lenders recommend that the GDS ratio be no more than 32% of your gross (before tax) monthly income.


Holder - The person who opens and contributes to an RDSP for a beneficiary.


Interest - The money (interest) earned on your investment.

Investment Income (or Return) - The income (money) you earn on your contributions/principal.

Issuer - The government, corporation or organization that commits to honour the terms of your investment.

Individual Beneficiary Plan - An RESP for one child and the subscriber can be anyone (friends and family).


Joint Subscriber - A co-contributor to an RESP set up by a subscriber. This individual must be the spouse or common-law partner of the subscriber.


Laddering - A co-contributor to an RESP set up by a subscriber. This individual must be the spouse or common-law partner of the subscriber.

Liquidity - Refers to the ability to access funds.


Maturity -When your investments meets the end of its term.


National Child Benefit Supplement (NCBS) -Provides support to low-income families with children. It’s a component of the Canada Child Tax Benefit (CCTB) that’s administered by the Canada Revenue Agency (CRA).


Old Age Security (OAS) -The Old Age Security pension is a monthly benefit available, if applied for, to most Canadians 65 years of age or over. Old Age Security residence requirements must also be met. An applicant's employment history is not a factor in determining eligibility, nor does the applicant need to be retired. Old Age Security pensioners pay federal and provincial income tax. Higher income pensioners also repay part or all of their benefits through the tax system.


Post-Retirement Benefit (PRB) - The Post-Retirement Benefit (PRB) is a new lifetime benefit that comes into effect January 1, 2012. This increases a contributors retirement income and rises with increases in the cost of living. Benefits are payable the following year, starting in 2013. Contributions are mandatory for CPP and QPP retirement pension recipients aged 60 to 65 who continue working. Those at least 65 but under 70 years of age, can choose not to contribute.

Principal - The initial amount invested.


Quebec Pension Plan (QPP) - The QPP is the Quebec equivalent of the Canada Pension Plan (CPP). See Canada Pension Plan, above, for details.


Return - The interest you may earn during the term of your investment.

Risk - The possibility of losses being suffered or the uncertainty of future returns. Risk can take several forms, some of which are financial risk, political risk, operational risk, environmental risk.


Subscriber - The person who opens and contributes to an RESP for a beneficiary.


Term - The duration on the investment.