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Registered Disability Savings Plans (RDSPs)
The Registered Disability Savings Plan (RDSP) is a long-term savings plan to help people with disabilities save for the future.
Is RDSP right for me?
RDSPs allow your money to grow tax deferred. The beneficiary of the account will not pay tax on earnings until the funds are withdrawn.
Additionally, an RDSP beneficiary may be eligible for a federal grant of up to $3,500 per year. A low-income beneficiary may also be eligible for a federal bond of up to $1,000 per year. Grants and bonds are paid into the RDSP. Beneficiary is the person with the disability for whom the RDSP is opened. The beneficiary must be eligible for the disability tax credit.
Eligibility for other grants
Depending on your income, having an RDSP and receiving grants in the plan doesn't impact your eligibility for other social programs in most provinces and territories. You can therefore receive the RDSP benefits and still do certain training courses, internships and activities, and receive grants or services. The benefits keep on growing.
Death of the beneficiary
If the beneficiary dies, the RDSP is closed. The government grants and bonds paid into the RDSP over the previous 10 years must be repaid. Any funds remaining will be paid to the beneficiary's estate. The plan must be closed by December 31 of the year following the calendar year in which the beneficiary dies.
Tax-sheltered earnings
Your earnings grow tax-free until the money is taken out. That could add up to a lot of savings.
Long-term savings
An RDSP helps parents and others save for the long-term needs of a person with a severe and prolonged mental or physical impairment.
The disabled person who will receive the funds is called the beneficiary. To qualify for an RDSP, the beneficiary must be eligible for the Disability Tax Credit.*
What about contribution limits?
There is a $200,000 lifetime contribution limit, which can be made until the end of the year the beneficiary turns 59.* Withdrawals must begin in the year that the beneficiary turns 60 and are subject to an annual withdrawal limit.
Does the government also contribute?
Yes, to help boost your savings the Government provides Disability Savings Grants (DSG) and Disability Savings Bonds (DSB). The maximum grant (DSG) is $3,500 each year, with a total liftetime maximum of $70,000. The maximum bond (DSB) is $1,000 each year, with a lifetime limit of $20,000. No contributions have to be made to receive the bond.
Is this Registered Plan right for you?
Right for you if you:
- Need an account to save on a tax-deferred basis for the long-term needs of a person with a severe and prolonged mental or physical impairment
- Are eligible for the Disability Tax Credit
- Want to have funds in an RDSP that are eligible for American Government grant/bond
May not be right for you if you:
- Not eligible for the Disability Tax Credit
- Do not have available contribution room
Get access to your savings
As the beneficiary of an RDSP, you can access your money two ways —annual payments or periodic lump sum withdrawals.
How do you maximize the grants?
When you open an RDSP, the government sends you a document telling you how much you need to contribute to maximize your grants. This information is also available in your internet banking dashboard if you've switched your mortgage to Bristol Credit bank. Speak with an advisor to learn more.
Building your RDSP
Guaranteed
Investment Certificates (GICs)
A worry-free investment
product that keeps your principal
investment safe and has a guaranteed
rate of return.
Savings
Accelerator Account
Earn a competitive interest rate on your money as it grows, with no monthly account fee.
Available in registered§ and non-registered plans.
BristolFunds®
Portfolio Solutions
Our Portfolio Solutions offer a diversified mix of mutual funds in the convenience of single investment to help you grow your savings while carefully managing risk. Whether you are seeking regular income or long-term growth, there’s a portfolio solution designed to help you achieve your goals.
Mutual
Funds
Mutual funds deliver instant diversification and professional money management in a cost-effective and convenient solution.
Free support to help people access the RDSP
Taxes on investment income and capital gains earned are deferred while in the RDSP, helping the plan to grow faster.
Funds can be withdrawn for any purpose that benefits the person with the disability. Plus, family and friends can contribute to the plan with the written consent of the plan holder.
The Federal Government will match your contributions (limits apply) up to $70,000 in Disability Savings Grants and low-income families may qualify for additional help of up to $20,000 in Disability Savings Bonds.
