Early Withdrawals
Any principal contributed to the RESP can be withdrawn at any time by its contributor. In this case, any eligible CESG payments on those contributions must be repaid to the Government. If the beneficiary has also received additional CESG, none of the beneficiaries in the plan will be eligible for additional CESG for the next 2 years. If the student elects to not attend a post-secondary institution, any accumulated interest may be withdrawn by the contributor; this is called an AIP (Accumulated Income payment). To receive this AIP, the plan must be in place for at least 10 years and all beneficiaries must be over 21 years old. This AIP is taxed as income unless it is rolled into a registered retirement savings plan (RRSP), subject to individual contribution limits and applicable rules.
Read more about this topic: Registered Education Savings Plan
Famous quotes containing the word early:
“...to many a mother’s heart has come the disappointment of a loss of power, a limitation of influence when early manhood takes the boy from the home, or when even before that time, in school, or where he touches the great world and begins to be bewildered with its controversies, trade and economics and politics make their imprint even while his lips are dewy with his mother’s kiss.”
—J. Ellen Foster (1840–1910)