Money terminology can be really daunting, especially since not everyone can be a wordsmith. There is almost nothing worse than having to read things and constantly having to stop so that you can Google a word. And sometimes it’s not possible to pay someone to help you decipher what is going on either. This post will help you make both heads and tails of what is going on, and make you a part of the loop!
Let’s start with the most basic of basics: the actual RESP itself. What does it stand for? Well, RESP stands for Registered Education Savings Plan, and this is the account you open for your child as a “college fund”. It’s also one of the best ways to save for their futures, so don’t be scared to do more research or open one! There are some rules and regulations, but basically anyone under the age of 17 can have an account like that, and it has tons of benefits.
Next let’s look at the Subscriber part. The Subscriber of the RESP account is most likely you, or whoever opens the account and pays money into it. Just remember that if you RESP is a family plan, the person you open the account for has to be related to you either by blood or through adoption. Don’t worry, we’ll get to the family plan in a little! This doesn’t mean that only a parent can open a RESP account though, as a Subscriber can be a sibling or a grandparent too. Basically, the Subscriber is in charge of managing the account and making sure the money keeps flowing in.
The beneficiary is the easiest term on this list. The beneficiary is just the person that the RESP account is for, so it could your child or grandchild or sibling. They are the person who will draw from the account to pay for their college or university fees. Mostly these can be either Individual Plans, or Family plans. The individual plan is set up by one subscriber for one beneficiary- and example of this would be a single parent with an only child. The family plan is almost the exact opposite, and is for a subscriber who wants to open a RESP account for several beneficiaries- this is more suited to families with three kids under the age of 17.