A Registered Education Savings Plan (RESP) is a special savings account that can help you, your family, or your friends save early for your child’s education after high school.

The Government of Canada allows savings for education to grow tax free until your child named in the RESP enrolls in education after high school. The child named in an RESP is known as a beneficiary.

A parent, grandparent, other relative, or friend, can open an RESP for a child. The person who opens an RESP is called a subscriber.

When you buy a Guaranteed Investment Certificates (GIC) from a bank, trust company, or credit union, it's like you are lending them your money for a while. The financial institution pays you to borrow your money for a set number of months or years.
How do GICs work?

• You may have to invest at least $500.
• You agree to keep your money in the GIC for a certain amount of time, such as six months, one year, two years, or up to 10 years.
• Most GICs pay you interest. A GIC may pay a higher interest rate than savings accounts, but not always.

Remember: With a GIC, you agree to lend your money for a set time

If you think you may need your money back early, buy a GIC that allows you to change your mind without any penalty.

Characteristics of a life income fund (LIF)

A life income fund is special registered retirement income fund (RRIF) into which a person can transfer the amounts that are in his or her supplemental pension plan or locked-in retirement account (LIRA). 

Unlike RRIFs, which have no ceiling on withdrawals, it is not possible to withdraw more than the maximum authorized for the year from an LIF.

As of 1 January 1998, it is no longer obligatory to convert an LIF into a life annuity at age 80.

Locked-In Retirement Account(LIRA)

The Locked-in Retirement Account or "LIRA" is a special RRSP contract designed specifically to hold locked-in pension funds (which means the funds are not available as a cash refund) for a former plan member, former spouse or common-law partner, or surviving spouse or partner, as the case may be, and provides an alternative to leaving the funds in the pension plan.

Upon termination of membership in a pension plan, the breakup of the marriage or common-law relationship, or death before retirement, the LIRA may be chosen, at any age, to receive, and hold until retirement, locked-in pension funds transferred from a pension plan.

Pension funds transferred to a LIRA can not be cashed out, but must be used to purchase a life annuity from an insurance company, transferred to a Life Income Fund (LIF) or to a Locked-In Retirement Income Fund (LRIF). The Life Annuity, LIF and the LRIF provide a pension income for life, as required by pension law.

The LIRA owner may purchase a life annuity at any age, or transfer their pension funds to a LIF or to a LRIF at any time prior to the end of the year in which she/he turns the age specified in the Income Tax Act.

A Registered Retirement Income Fund (RRIF) works like a Registered Retirement Savings Plan (RRSP) in reverse. Before, you were putting money into your RRSP as savings. Now, you withdraw money from your RRIF for income after you retire.

 Like an RRSP, you choose the types of investments to hold in a RRIF. You have to follow rules about taking out a certain amount each year.