Once the RDSP is opened, the Government of Canada may issue the plan holder grants and bonds. Let’s take a closer look at the RDSP.
Grants and Bonds
The Government of Canada pays matching grants into the RDSP. The amount depends on the beneficiary’s adjusted family net income as well as the contribution amount. The Government of Canada also contributes up to $1,000 into the RDSP as a bond for low-income Canadians with disabilities. Bond payments max out at $20,000 (lifetime duration) and are only available until the beneficiary turns 49.
Is the RDSP Tax Deductible?
No. Contributions made to an RDSP are not tax deducible. Contributions withdrawn from an RDSP are not counted as income. However, conditions apply. Grants and bonds, investment income that has been earned within the RDSP and money from some rollover scenarios are counted as income.
Who Can Open and Operate the RDSP?
The beneficiary is the person who is approved for the Disability Tax Credit. The plan holder is the person that opens and oversees the plan. The beneficiary and plan holder can be two different people. For example, a parent opens a plan for their disabled child. Sometimes the beneficiary and plan holder are the same people. A legal adult can be the beneficiary and the plan holder if the financial organization they are working with determines they can open and operate the plan without legal or guardianship assistance. In both scenarios, the plan holder and the beneficiary must have a valid Canadian Social Insurance Number.
Where to Open an RDSP?
Specific Canadian financial organizations offer the RDSP. An account with these organizations is not required in order to open an RDSP. These institutions are:
- ATB Securities Inc.
- Bank of Montreal
- Bank of Nova Scotia
- Central 1 Credit Union
- Central 1 Trust Company
- Concentra Bank
- Credential Asset Management Inc.
- Credential Qtrade Securities Inc.
- Investors Group Trust Co. Ltd.
- Fonds d'investissements FMOQ inc. (French only)
- Mackenzie Financial Corporation
- RBC Royal Bank
- TD Waterhouse Canada Inc.
- Natcan Trust Company
- Leede Jones Gable Inc.
Where to Learn More?
The Government of Canada’s website has more information on the RDSP and other disability assistance programs. The institutions listed above can also be of assistance for those seeking more information.