Registered Disability Savings Plan
The RDSP is a tax-efficient savings plan designed to help parents or caregivers save for a person with a disability. One of the advantages of an RDSP is that investment income earned inside the plan is tax-free. Additionally, contributions to the RDSP may be eligible for the Canada Disability Savings Grant (CDSG), which can add to the total savings in the plan over time.
What is a Registered Disability Savings Plan (RDSP)?
The Registered Disability Savings Plan (RDSP) is a government-registered savings plan designed to help individuals with disabilities, along with their families or caregivers, save for future medical and living expenses.
The RDSP is available for disabled individuals who qualify for the disability tax credit (DTC). To be eligible, an accredited medical practitioner must certify that the individual has a qualifying disability.
Contributions to the RDSP may be eligible for grants through two financial programs offered by the Canadian government, the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB).
The money in an RDSP grows on a tax-deferred basis, meaning that it is tax-sheltered until the recipient starts making withdrawals.
Benefits of an RDSP
How it works
The RDSP Plan Holder
● A legal parent, guardian, tutor, or curator for the beneficiary.
● An individual who is legally authorized to act on behalf of the beneficiary.
● An organization that is legally authorized to act on behalf of the beneficiary.
● Have a valid Social Insurance Number
● Be eligible for the Disability Tax Credit (DTC)
● Be a resident of Canada when the plan is opened and throughout the period when contributions are made
● Be under the age of 60, except when transferring an existing RDSP to a new plan.