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The RDSP is a savings plan designed for eligible Canadians with disabilities. Money in the plan can grow while taxes are deferred on any interest or investment income. The government offers matching grants of up to $70,000. In addition, low income families may receive up to $20,000 in savings bonds. The goal is to support the long-term financial security of the person with a disability.

Key Features of the RDSP

  • The person with a disability is the beneficiary of the plan. The beneficiary can have only one RDSP.
  • Anyone can contribute to the plan with the written permission of the plan holder.
  • Contributions are not tax deductible (unlike an RRSP). You may only contribute after-tax dollars.
  • There is no limit to the amount you can contribute each year. You may contribute up to $200,000 in total to the plan. Contributions are allowed until the end of the year in which the beneficiary turns 59.
  • Government matching grants are available until December 31 of the year in which the beneficiary turns 49.
  • When contributions are withdrawn, they are not included as income to the beneficiary when they are paid out of an RDSP. However, all other sources of income are included in the beneficiary’s income for tax purposes when withdrawn from the account. This includes:
    • The Canada disability savings grant
    • The Canada disability savings bond
    • Investment income earned in the plan
    • Money transferred – or rolled over - from retirement savings plans.
  • Withdrawals can be used for any purpose, as long as they are for the benefit of the person with the disability (the plan's beneficiary).
  • The beneficiary must begin receiving payments from the plan by the end of the year they turn 60.

For more information, visit the RBC Royal Bank RDSP site or consult your advisor.

Disclosure

Last reviewed: January 1, 2023

This has been provided by RBC Global Asset Management Inc. (RBC GAM) and is for informational purposes only. It is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. RBC GAM takes reasonable steps to provide up-to-date, accurate and reliable information, and believes the information to be so when provided. Information obtained from third parties is believed to be reliable but RBC GAM and its affiliates assume no responsibility for any errors or omissions or for any loss or damage suffered. RBC GAM reserves the right at any time and without notice to change, amend or cease publication of the information.