Table of Contents:
About This Plan
The Registered Disability Savings Plan (RDSP) is a government-supported program that allows eligible Canadians with disabilities to grow their savings tax-deferred until withdrawal and benefit from generous federal government Canada incentives such as Disability Savings Grants (CDSG) and Canada Disability Savings Bonds (CDSB). It’s designed to ensure that the beneficiary has financial security later in life, without affecting most income-tested benefits, but an individual’s income level (according to the table below for 2025) determines the amount of grant or bond they may receive:
| Incentive Type | Full Amount if Income ≤ | Partial Amount if Income Between | No Amount if Income ≥ |
|---|---|---|---|
| CDSB (Bond) | $37,487 | $37,487 – $57,375 | $57,375 |
| CDSG (Grant) | $114,750 | Above this amount | Reduced rate applies |
The RDSP provides a long-term savings opportunity under special conditions. The lifetime contribution limit (including personal and family contributions) for each individual is $200,000, and the government provides support through grants up to $70,000 and bonds up to $20,000 over the lifetime.
A summary of contributions and the related details is shown in the table below:
| Contribution Type | Amount | Details |
|---|---|---|
| Lifetime Contribution Limit | $200,000 | Any individual may contribute with written permission from the account holder |
| Government Grant (CDSG) | Up to $70,000 lifetime | Income-based matching at 100%, 200%, or 300% rate |
| Government Bond (CDSB) | Up to $20,000 lifetime | No personal contribution required; based on income level |
To open an RDSP account, the following steps are required:
- Confirm DTC eligibility with the Canada Revenue Agency.
- Choose a participating financial institution.
- Complete the RDSP application and contribution plan form.
- Apply for grants and bonds through the same institution.
Regarding withdrawals, it is important to note the following:
- Original contributions are non-taxable when withdrawn.
- Withdrawals must begin by the end of the year the beneficiary turns 60.
- Part of each withdrawal is taxable in the beneficiary’s hands (government grants, bonds, and investment growth).
Simple Assessment Form
To choose the best and most suitable investment and accurately assess the costs, please complete the form below.
Benefits
- Tax-Deferred Growth – Your investments grow without annual taxation until withdrawal.
- Generous Government Incentives – Receive matching Canada Disability Savings Grants (CDSG) and Canada Disability Savings Bonds (CDSB).
- With no Impact on Most Benefits – RDSP savings generally do not reduce eligibility for federal or provincial programs, such as OAS, GIS, CPP, and disability assistance.
- Long-term planning and financial support: Funds can be invested to grow over decades, enhancing the family’s economic security, and supporting the beneficiary in adulthood and retirement.
- Investment flexibility: The ability to invest in various funds or financial instruments similar to other registered accounts (RRSP, RESP).
Conditions
- Only one RDSP can exist for each individual.
- Government contributions can be received up to the year the individual turns 49.
- The individual must be a resident of Canada and have a valid Social Insurance Number (SIN).
- Must be eligible for the Disability Tax Credit (DTC).
- The RDSP account can remain active until the end of the year the individual turns 59, allowing personal contributions to be made.
Real-Case Examples
Mary is 20 years old and, due to congenital blindness, is eligible for the Disability Tax Credit (DTC). Her family has opened an RDSP for her and deposits $1,000 into the account each year. The Canadian government adds up to $3,000 per year through the Canada Disability Savings Grant (CDSG), depending on the family’s income level. Additionally, Mary may receive up to $1,000 per year from the Canada Disability Savings Bond (CDSB), even if her family makes no contributions. As a result, with a small annual deposit, Mary’s account could grow to tens of thousands of dollars over the years, securing her financial future.
FAQ
At Insufin, we believe every Canadian with a disability deserves the opportunity to build a secure financial future.
