Grow your RDSP savings for a more secure future with government grants and bonds
We all want the peace of mind that comes from knowing that the people we cherish can live with dignity, self-worth, and financial security. A Registered Disability Savings Plan (RDSP) is like a pension plan for individuals living with a disability. The earlier you start, the longer your investment can grow, and the more confident you’ll feel knowing you have a plan in place for the future.
Plus, taking advantage of the government contributions—the RDSP’s most powerful secret weapon—can help increase your long-term savings by a startling amount. With the help of the annual Canadian Disability Savings Bond (CDSB), low-income Canadians with disabilities receive an annual contribution of $1000, up to a lifetime amount of $20,000. With no contributions required, that’s money in the bank!
Speaking of money in the bank, SCU has a no-fee Disability Benefit Chequing option for members who qualify for the Government of Canada’s Disability Tax Credit (DTC), and who are also eligible to open an RDSP.
Learn more about opening a Disability Benefit Chequing account and the DTC.
Frequently asked questions
What is an RDSP?
The Registered Disability Savings Plan (RDSP) is a long-term savings plan designed to help Canadians with disabilities and their families save for the future. The plan is intended to help an individual who is approved to receive the disability tax credit.
Who can contribute to an RDSP?
Although there is a lifetime contribution limit of $200,000, contributions to an RDSP can be made by family, friends, neighbours, charities, foundations, and organizations, provided they have permission from the plan holder.
What types of disabilities qualify for a RDSP?
If a beneficiary qualifies for the Disability Tax Credit (DTC), they can open an RDSP. That means people with hundreds of different disabilities qualify.
How can I use my RDSP funds?
There are no restrictions on how the funds are used. The funds from your RDSP can be used in any way you choose.
Are many Canadians taking advantage of an RDSP?
In 2022, a Canadian Survey on Disability (CSD) found that 27%, or 8.0 million Canadians, aged 15 or older had one or more disabilities that limited them in their daily activities. Unfortunately, on average, only 6% of Canadians living with a disability held RDSPs.
What’s the maximum amount of government assistance a beneficiary can potentially receive?
Based on income, beneficiaries can potentially receive $90,000 in government grants and bonds. To break it down, that’s up to $70,000 from the Canada Disability Savings Grant (CDSG) and $20,000 from the Canada Disability Savings Bond (CDSB). Learn more about grants and bonds.
Are there hidden terms or fees that come with an RDSP?
No, RDSPs come with no fees or hidden terms.
Can I have more than one RDSP?
No, a beneficiary can only have one RDSP at a time.
Can I open an RDSP and another registered product for the same person?
Yes, a person can also be the beneficiary of other registered products, such as RESPs, if they qualify.
Can more than one holder contribute to an RDSP?
Yes, you can have more than one holder contribute to an RDSP as long as they are a qualifying holder and meet the required criteria.
Eligibility: Opening an RDSP
You can open an RDSP and be the plan holder if you:
- Qualify for the Disability Tax Credit (DTC)
- Are a person with a disability who is contractually competent
- Are between 18 – 60 years old
- Have a valid Social Insurance Number (SIN)
- Are a Canadian resident when the plan is opened
You can open an RDSP on behalf of a person with a disability if you are:
- A legal parent of a child with a disability who has not reached the age of majority
- A guardian, qualifying family member, or other representative who is legally authorized to act on behalf of a person with a disability
HOT TIP: If you’re interested in opening an RDSP, the beneficiary must be approved for the DTC first. Visit the Government of Canada’s website to learn more about applying for the DTC .
How RDSPs work
- You open a qualifying account, either for yourself or a beneficiary.
- The government adds grants and bonds to help you save
- The beneficiary uses withdrawals to help with living costs and care expenses
Contribution limits
RDSPs have a $200,000 maximum lifetime contribution limit, with no annual minimum or maximum requirements (however, grants max out annually). Note that, unlike a TFSA, you can’t regain that contribution room if you make a payment or withdrawal.
Government benefits
Government contributions are an RDSP’s most powerful secret weapon. The federal government will match your RDSP contributions through the Canada Disability Savings Grant (CDSG), providing an exceptional return on your investment. Through the CDSG, the Government of Canada may contribute up to $3 for every $1 you put into the fund, depending on your income. You can receive a maximum of $3,500 per year and $70,000 in total.
In addition, through the Canadian Disability Savings Bond (CDSB), a bond for low-income families, the federal government will contribute up to $1,000 annually for 20 years, to a lifetime maximum of $20,000. You don’t need to make any contributions to receive the CDSB — simply open the account. The CDSG and CDSB are available until you turn 49.
HOT TIP: Since there are annual grant maximums, opening an RDSP early is the best way to receive as much grant money as you can. Discover how much the CDSG and CDSB can help your money grow over time.
Note: Income payments from RDSPs don’t affect Old Age Security, Guaranteed Income Supplement, or the Canada Pension Plan. In Manitoba, the provincial government fully exempts any money saved in an RDSP, including government grants and bonds in calculating income and assets when determining eligibility for Employment and Income Assistance (EIA), also known as social assistance.
Making the most of your RDSPs
Four ways to start saving in an RDSP
Whether you’re opening an RDSP for yourself or on behalf of a loved one, you can get more from your RDSPs with these simple strategies:
- Start early: Even if you only have a small amount to contribute each month, time also plays an important role in growing your savings. Not only are you earning more interest long-term, but if your loved one is eligible for the CDSB, they get an automatic $1000 every year—whether you put money into the account or not (to a lifetime maximum of $20,000).
- Set pre-authorized debits: Pre-authorized debits are a great solution to help you remember to contribute to an RDSP. Setup is fast and easy—you can sit down and plan once, then let the automation do the heavy lifting.
- Encourage RDSP contributions as gifts: RDSPs are great ways for friends and family to invest in your loved one’s future. For larger gifts, you may want to consider contributing to the RDSP over a few years to allow you to receive more in government grants.
- Explore different savings and investment options: There are RDSP options to suit every need, including variable savings, GICs, and mutual funds. An SCU specialist can help you explore which option is right for you.
Let’s build a plan together
Now that you have a better understanding of the RDSP and the eligibility requirements, it’s the perfect time to determine your next steps. We can walk you through the process of opening an RDSP, make sure you receive all available government grants and bonds, and help you choose the investment options that best meet your goals.
Call us at 1.800.728.6440 or book an appointment online to talk to a deposit specialist who can help you explore the possibilities.
