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Any principal contributed to the RESP can be withdrawn at any time by its contributor.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 If the student elects to not attend a post-secondary institution, any accumulated interest may be withdrawn by the contributor; this is called an AIP (Accumulated Income payment).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:
“Today’s pressures on middle-class children to grow up fast begin in early childhood. Chief among them is the pressure for early intellectual attainment, deriving from a changed perception of precocity. Several decades ago precocity was looked upon with great suspicion. The child prodigy, it was thought, turned out to be a neurotic adult; thus the phrase “early ripe, early rot!””
—David Elkind (20th century)