A registered disability savings plan (RDSP) is a savings plan that is intended to help parents and others save for the long-term financial security of a person who is eligible for the disability tax credit (DTC). It is a Canada-wide registered matched savings plan specific for people with disabilities. It is designed to help the holder be better financially prepared for their future, keeping in mind that disabled Canadians will inevitably have higher than average expenses.
For every $1 put in an RDSP account, the federal government will – depending on your family income – match with up to $3! An RDSP can get a maximum of $3,500 in matching grants in one year, and up to $70,000 over the beneficiary’s lifetime. A beneficiary’s RDSP can receive a grant on contributions made until December 31 of the year in which the beneficiary turns 49. The RDSP is exempt from most provincial disability and income assistance benefits. It does not get clawed back and it does not reduce disability benefits payments. People with disabilities can choose what to do with the money when it comes out- there are no restrictions on how the money can be spent! Contributions to an RDSP are not tax deductible and can be made until the end of the year in which the beneficiary turns 59. Contributions that are withdrawn are not included as income to the beneficiary when they are paid out of an RDSP.
To open an RDSP, a person who qualifies to be a holder of the plan must contact a participating financial institution that offers RDSPs. These financial institutions are known as RDSP issuers. Click here to see a full list:
Bank of Montreal
Bank of Nova Scotia
Central 1 Credit Union
Central 1 Trust Company
CIBC
Desjardins
Global Growth Assets Inc.
Investors Group Trust Co. Ltd.
Fonds d’investissements FMOQ inc. (French only)
Mackenzie Financial Corporation
RBC Royal Bank
TD Waterhouse Canada Inc.