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Updated 2mo ago.
Updated 2mo ago.
The RDSP is a tax-deferred savings account designed to help individuals eligible for the Disability Tax Credit (DTC) save for their long-term financial security. The federal government provides generous matching grants (Canada Disability Savings Grant) and bonds (Canada Disability Savings Bond) that can triple contributions. Withdrawals are generally not taxed until funds are taken out.
A parent opens an RDSP for their child who qualifies for the Disability Tax Credit and contributes $1,500 per year. The government provides up to $3,500 in Canada Disability Savings Grant (matching up to 300%) and up to $1,000 in Canada Disability Savings Bond for low-income families — without any contribution required. Over 20 years, grants alone can reach $70,000 (lifetime max) and bonds $20,000. The money grows tax-deferred in the account, for example in a balanced ETF like VBAL.TO.
The RDSP is the most generous government-matched account in Canada. Many eligible families are unaware of it and leave tens of thousands of dollars unclaimed. There is no annual contribution limit (lifetime max of $200,000), and grants are retroactive for 10 years. It is an essential financial planning tool for ensuring the long-term security of a person with a disability.