Registered Disability Savings Plan: grants and bonds

An RDSP can receive federal matching grants and, for eligible low- and modest-income beneficiaries, bonds without a contribution; Disability Tax Credit approval is central.

A Registered Disability Savings Plan (RDSP) is a long-term savings plan for a beneficiary approved for the Disability Tax Credit (DTC). Depending on eligibility, family income, contributions and unused entitlements from earlier years, the plan may receive Canada Disability Savings Grants and Bonds.

Grant versus bond

• Grant: the federal government may match eligible contributions at rates that depend on family income. The lifetime grant limit is $70,000.
• Bond: an eligible low- or modest-income beneficiary may receive a bond without making a contribution. The lifetime bond limit is $20,000.

Annual matching rates and income thresholds change. Check the current federal calculator and your available carry-forward entitlements before choosing a contribution amount.

Steps to get started

1. Confirm DTC approval and the beneficiary's eligibility and age limits.
2. Choose a participating financial institution and open the RDSP.
3. Ask the issuer to apply for grants and bonds, and ensure required tax returns are filed so family income can be assessed.
4. Review fees, investments, beneficiary/holder roles and the plan's withdrawal rules.

Understand withdrawals first

Grants, bonds, growth and some transferred amounts can become taxable when paid out. Early withdrawals may trigger repayment of government assistance. Get an issuer or qualified adviser to calculate the effect before withdrawing.

Government of Canada: RDSP grants and bonds

Sources and limits

Sources: Employment and Social Development Canada and CRA RDSP guidance. Income thresholds and carry-forward calculations should be checked for the current year.

General information based on federal and national rules; provincial rules may differ. Confirm with the official body before acting.