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An RDSP is a savings plan that helps Canadians with disabilities save for a more secure financial future. Find out the benefits of opening an RDSP, including government grants.
A registered disability savings plan (RDSP) is a long-term savings plan available to Canadians who have been approved to receive the federal disability tax credit. The lifetime contribution limit of an RDSP is $200,000, and contributions can be made until Dec. 31 of the year in which the beneficiary has their 59th birthday.
Contributions to an RDSP are not tax-deductible, but they grow tax-free until withdrawn from the plan. Contributions are not taxable, but income growth, bonds and grants are taxable in the hands of the RDSP beneficiary.
One of the benefits of opening an RDSP is matching grants from the Canadian government. It will pay matching Canada Disability Savings Grants (CDSGs) to a maximum of $3,500 a year and $70,000 in a lifetime, depending on the beneficiary’s adjusted family net income and the amount contributed. For low-income beneficiaries, the government will also pay Canada Disability Savings Bonds (CDSB), up to $20,000.
Learn more about RDSPs and how to open a plan. PLAN Institute, a non-profit organization in Vancouver, offers a free support program to help Canadians access RDSPs.
Example: “While many families start an RDSP for a child with a disability, Rohan started one for himself once he reached the age of majority in his province.”
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