RDSP Overview
| Feature | Details |
|---|
| Lifetime contribution limit | $200,000 |
| Annual contribution limit | None (limited by lifetime max) |
| Government grants (CDSG) | Up to $3,500/year |
| Government bonds (CDSB) | Up to $1,000/year |
| Lifetime grant maximum | $70,000 |
| Lifetime bond maximum | $20,000 |
| Maximum age for grants/bonds | Must be received before age 49 |
| Maximum age to open RDSP | Before age 60 |
| Tax on growth | Tax-deferred; withdrawals partially taxable |
| Impact on government benefits | None — RDSP withdrawals don’t affect OAS, GIS, etc. |
Eligibility Requirements
| Requirement | Details |
|---|
| Residency | Canadian resident |
| SIN | Valid Social Insurance Number |
| DTC eligible | Must have approved Disability Tax Credit (T2201) |
| Age | Under 60 to open; under 49 to receive grants/bonds |
| Who can open | Beneficiary or their legal representative |
| Who can contribute | Anyone (beneficiary, family, friends) |
Canada Disability Savings Grant (CDSG)
| Family Income (2025) | Matching Rate | On First | Plus | On Next | Max Annual Grant |
|---|
| Under ~$106,717 | 300% | $500 | + | 200% on $1,000 | $3,500 |
| Over ~$106,717 | 100% | $1,000 | | | $1,000 |
“Family income” is the beneficiary’s income (and spouse’s) if over 18, or the parent’s income if the beneficiary is under 18.
Optimal Contribution to Maximize Grants
| Income Level | Contribute | Grant Received | Effective Return |
|---|
| Low/moderate income | $1,500/year | $3,500/year | 233% instant return |
| Higher income | $1,000/year | $1,000/year | 100% instant return |
| Minimum to get max grant (low income) | $1,500 | $3,500 | 233% |
Canada Disability Savings Bond (CDSB)
| Family Income (2025) | Bond Amount | Contribution Required |
|---|
| Under ~$35,466 | $1,000 | $0 |
| $35,466-$54,677 | Partial (pro-rated) | $0 |
| Over ~$54,677 | $0 | N/A |
Bonds require NO contribution — the government deposits them automatically for low-income beneficiaries.
Carry-Forward Rules
| Rule | Details |
|---|
| Grant carry-forward | Up to 10 years of unused grants |
| Bond carry-forward | Up to 10 years of unused bonds |
| Max carry-forward grants per year | $10,500 |
| Max carry-forward bonds per year | $11,000 |
| Strategy | Open RDSP even if you can’t contribute — clock starts for carry-forward |
Carry-Forward Example
| Scenario | Details |
|---|
| Person opens RDSP at age 30 (was DTC-eligible since 20) | 10 years of missed grants |
| Low income, contribute $1,500/year | Catch-up: receive up to $10,500/year in grants |
| Years to catch up | 6-7 years |
| Total catch-up grants | ~$70,000 potential |
RDSP Investments
| Investment Option | Available | Notes |
|---|
| GICs | ✅ | Safe, guaranteed |
| Mutual funds | ✅ | Common, but watch MER fees |
| ETFs | ✅ (at some providers) | Lower fees than mutual funds |
| Stocks | ✅ (at some providers) | More complex |
| Savings accounts | ✅ | Low return |
Recommended Approach
| Risk Tolerance | Allocation | Example |
|---|
| Conservative | 30% equity / 70% fixed | VCNS or balanced fund |
| Moderate | 60% equity / 40% fixed | VBAL or similar |
| Aggressive (young, 20+ years to withdrawal) | 80% equity / 20% fixed | VGRO or similar |
Where to Open an RDSP
| Provider | Investment Options | Minimum | Notes |
|---|
| BMO | Mutual funds, GICs | $0 | Good fund selection |
| CIBC | Mutual funds, GICs | $0 | Branch support |
| RBC | Mutual funds, GICs | $0 | Branch support |
| TD | Mutual funds, GICs, e-Series | $0 | e-Series = low-cost |
| National Bank | Mutual funds | $0 | |
| Mackenzie Investments | Mutual funds | $0 | |
Few brokerages offer self-directed RDSP with ETFs. TD’s e-Series funds are a low-cost alternative.
Withdrawal Rules
| Rule | Details |
|---|
| Disability Assistance Payments (DAPs) | Discretionary withdrawals at any time |
| Lifetime Disability Assistance Payments (LDAPs) | Must start by age 60; annual payments until death |
| 10-year assistance holdback amount | $3 of grants/bonds repaid for every $1 withdrawn (if grants received in last 10 years) |
| Taxable amount | Government portions (grants, bonds, growth) are taxable |
| Non-taxable amount | Your original contributions are not taxable |
| Best strategy | Wait 10+ years after last grant/bond before withdrawing |
Withdrawal Taxation
| Component | Tax Treatment on Withdrawal |
|---|
| Your contributions | Tax-free |
| Government grants (CDSG) | Taxable as income |
| Government bonds (CDSB) | Taxable as income |
| Investment growth | Taxable as income |
RDSP vs Other Accounts
| Feature | RDSP | TFSA | RRSP |
|---|
| Government matching | ✅ Up to $3,500/year | ❌ | ❌ |
| Government bonds (free money) | ✅ Up to $1,000/year | ❌ | ❌ |
| Tax-free growth | Tax-deferred | ✅ Tax-free | Tax-deferred |
| Tax on withdrawals | Partially taxable | Tax-free | Fully taxable |
| Affects GIS/OAS | ❌ No | ❌ No | ✅ Yes |
| Contribution limit | $200,000 lifetime | $7,000/year | 18% of income |
| DTC required | ✅ Yes | ❌ No | ❌ No |
RDSP Growth Example
| Year | Contribution | Grant | Bond | Balance (6% return) |
|---|
| 1 | $1,500 | $3,500 | $1,000 | $6,360 |
| 5 | $1,500/yr | $3,500/yr | $1,000/yr | $40,300 |
| 10 | $1,500/yr | $3,500/yr | $1,000/yr | $96,400 |
| 20 | $1,500/yr | $3,500/yr | — | $228,900 |
| 30 | $1,500/yr | — | — | $360,000+ |
With only $1,500/year in personal contributions, the RDSP can grow to $360,000+ through government grants, bonds, and compound growth.
Common RDSP Mistakes
| Mistake | Better Approach |
|---|
| Not opening RDSP (even if can’t contribute) | Open immediately — starts carry-forward clock and bond eligibility |
| Contributing more than needed for max grant | Only need $1,500/year (low income) or $1,000/year (high income) |
| Withdrawing within 10 years of grants | Wait 10+ years to keep all government money |
| Not applying for DTC | Apply even if unsure — many conditions qualify |
| Investing too conservatively for young beneficiaries | 20+ year time horizon can handle more equity exposure |
| Not naming a beneficiary | Plan for what happens to RDSP at death |