RDSPs
A Registered Disability Savings Plan (RDSP) provides financial security and peace of mind for people with disabilities. Find out how a BMO RDSP can help you meet your financial goals.
Earnings in your RDSP are tax-sheltered- Access your money when you need it footnote star
- Benefit from government programs to earn additional income
Limited-time offer:
Get up to $3,800† when you transfer registered investments and start a savings habit in a BMO RDSP.
Why invest in an RDSP?
Tax-sheltered earnings
Your earnings grow tax-free until the money is taken out. That could add up to a lot of savings.
Get access to your money footnote star
As the beneficiary of an RDSP, you can access your money two ways —annual payments or periodic lump sum withdrawals.
You’re still eligible for other programs
Income payments from RDSPs don’t affect Old Age Security, Guaranteed Income Supplement and the Canada Pension Plan, and in most provinces and territories, you’ll still qualify for existing provincial social assistance programs.
RDSPs by the numbers
$200,000:
Your lifetime contribution limit. There’s no annual limit, though.
60:
Age the beneficiary needs to be under to open an account.
$70,000:
Maximum amount you’re eligible for in grants.
How to make the most of your RDSP
A major benefit of an RDSP is that you still qualify for great government incentives when you have one. The grants and bonds below are a great way to potentially boost your savings.
Canadian Disability Savings Grant (CDSG)
The Canadian Disability Savings Grant can add an annual amount of $3,500 to a lifetime max of $70,000 to an RDSP. A CDSG does require you to make contributions.
Canada Disability Savings Bond (CDSB)
The Canada Disability Savings Bond can give you an extra $1,000 annually to your RDSP to a lifetime max of $20,000 if you qualify. A CDSB doesn’t require you to make any contributions.
Take advantage of our savings account rates
On top of everything else an RDSP can do for you, here’s another great reason: Great rates to help you make real financial progress right from the start. It’s easy to get started today.
Investments you can hold in your RDSP account
Guaranteed investment certificates protect your initial investment, so you’ll get that investment back at the end of the set term. Plus, you can count on a guaranteed rate of return, depending on the GIC you pick.
Ways to Invest:
- With a BMO professional
We have a comprehensive selection of professionally managed mutual funds that can be a great fit in your RDSP. Design the portfolio that works for your goals and how much risk you’re comfortable with.
Ways to Invest:
- With a BMO professional
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RDSP FAQs
The Registered Disability Savings Plan (RDSP) is a tax-sheltered plan created by the federal government to help people with disabilities build long-term financial security.
For the beneficiary of an RDSP, there are three big advantages. Earnings grow tax-free, so your savings grow faster. RDSPs are also eligible for government incentives, up to $70,000 in grants and $20,000 in bonds. And payments to a beneficiary from an RDSP do not affect income-tested programs like Old Age Security, the Guaranteed Income Supplement and the Canada Pension Plan.
The disability tax credit is a federal income tax credit for people with disabilities and people who support them. It was created to help offset some of the unavoidable expenses unique to those with severe and prolonged impairment. A list of maximum credit amounts for previous years can be found here.
Anyone who’s eligible for the Disability Tax Credit can be the beneficiary of an RDSP. To qualify you need to be a Canadian resident, have a valid Social Insurance number, and be under 60.
To be eligible for Disability Tax Credit, you must complete a Disability Tax Credit Certificate, Canada Revenue Agency (CRA) Form T2201, with the assistance of a qualified professional, and receive approval from CRA.
Tip: to help your money grow faster, consider setting up automatic RDSP contributions at regular times throughout the year.
No, contributions to an RDSP are not tax deductible. But when those contributions are paid out to the beneficiary they won’t count as income.
There are two government incentives available through RDSPs. The Canada Disability Savings Grant can add up to $3,500 a year to a lifetime maximum of $70,000. The Canada Disability Savings Bond can add up to $1,000 annually to a lifetime maximum of $20,000. So that’s a great incentive for starting a plan early!
There’s no annual contribution limit for an RDSP. The lifetime maximum for a beneficiary is $200,000.
Good question. You can contribute until the end of the calendar year in which the beneficiary turns 59. Government incentives can only be received up to the end of the calendar year in which the beneficiary turns 49.
A beneficiary can access funds from their RDSP by either annual payments (Lifetime Disability Assistance Payments) or occasional lump sum payments (Disability Assistance Payments). These payments can be used for any purpose. Income tax doesn’t apply to the original contributions, only to investment earnings, rollover amounts, grants and bonds.
There are a few rules that apply to RDSP withdrawals. Beneficiaries should plan to earn all their grants and bonds 10 years before they start drawing an income, because any grants or bonds received in the 10 years preceding withdrawals or payments must be repaid to the government. Lifetime Disability Assistance Payments can begin at any time, but have to start by the end of the calendar year in which the beneficiary turns 60.
To find out more about RDSP payments and rules, check the Government of Canada website.
Ways to contact us
There are various ways to get in touch. Choose your preferred method.
- Footnote dagger detailsTerms and conditions apply
- Footnote star detailsStrict penalties for withdrawals before incentives are vested may apply.