Canada Education Savings Grant (CESG) — A federal government grant deposited automatically into a Registered Education Savings Plan (RESP), equal to 20% on the first $2,500 of the annual RESP contribution to a maximum grant of $7,200 per child. Additional grants of 10% or 20% on the first $500 of annual contributions are available for qualifying families (based on family income).
Canada Learning Bond — A federal government grant, paid directly into an RESP, available to families with modest income to help them pay for post-secondary education for their children born after 2003.
Canada Pension Plan (CPP) — A social program operated by the Canadian government that provides retirees with a pension income when they retire, based on their contribution to the plan during their working years. It also provides retirees and their dependants with basic financial protection if the retiree becomes disabled or dies.
Canada Revenue Agency (CRA) — The department of the government of Canada that is responsible for financial areas such as tax law and many social and economic benefit programs in Canada.
Capital gain (loss) — The difference between the cost of an asset and the proceeds received from the sale of an asset.
Cheques — A way of paying for goods or services. A cheque is written for the amount to be paid, and when the recipient cashes the cheque, the money is transferred from the payer’s account into the payee’s account.
Client Card — This is provided to you when you open an account. It allows you to access your accounts while in your bank branch, at an ATM or store, or through online banking, often in combination with your Personal Identification Number (PIN) or RBC Online Banking password. Also known as a bank card or debit card.
Closed-end lease — A rental agreement in which you are not obligated to purchase the item leased when the term of the lease is complete.
Closed mortgage — A mortgage which cannot be prepaid, renegotiated or refinanced prior to the expiry of the term. You will pay a prepayment charge if you wish to renegotiate your interest rate or pay off your mortgage balance prior to the end of its term. Usually offered at a lower rate than a more flexible open mortgage.
Closing costs — The various fees or one time costs needed to complete or “close” the purchase of a home. Standard closing costs include adjustments for prepayments of taxes, utilities and condominium common expenses, if any, made by the vendor; property land transfer taxes; property insurance; and legal/notary fees.
Co-applicant — A second person named in addition to the primary person requesting a credit card, mortgage or loan and is equally responsible for the payments and money borrowed.
Common shares — An ownership stake in a company that gives you the right to vote on decisions regarding how the company is run.
Compounding — Investment income that is earned on previously earned investment income. This “income on income” increases your rate of growth over time.
Condominium — A type of real estate in which the living units are individually owned while the common areas (such as hallways, lobbies, elevators and recreational areas) are owned jointly by all the unit owners.
Contents insurance — see Renters or Tenants insurance.
Convertible mortgage — A fixed-rate or variable rate mortgage which offers the same benefits as a closed mortgage, but which can be converted to a longer, closed mortgage at any time without pre-payment charges.
Corporation — A company that is structured as a separate legal entity from its owners. A corporation may be privately or publicly owned.
Credit bureau report — Your credit history is compiled by Canada’s central credit bureaus. When a bank or utility considers an application for credit or an account, it will request the applicant’s credit report.
Credit card — A plastic card that enables you to purchase items or services from a range of stores and establishments and pay for them at a later date. A minimum amount must be repaid each month. If you pay the full balance by the due date, no interest is charged.
Credit card balance — The total amount owing on your credit card.
Credit check — A review by a lender or other party, such as a prospective landlord, of a person’s track record for repaying borrowed funds according to schedule.
Credit history — A list of facts, gathered from financial institutions, retailers and other lenders, about how you have handled credit in the past. Most of this information stays in your file for seven years. This information forms a profile of your credit-worthiness, called your credit rating. Your credit rating is used to help banks and other companies to decide whether they will allow you to borrow money, and how much.
Credit limit — The amount of credit a financial institution will give a client. Can also be the maximum amount a credit card company allows someone to borrow on one credit card.
Currency — The form of money that is accepted in a country. Canada’s currency is the Canadian dollar.