Registered Disability Savings Plan (RDSP)

The RDSP is a long-term savings plan created by the federal government to help Canadians with severe and prolonged disabilities, and their families, save for the future.

RDSP accounts are held with CIBC Securities Inc.

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RDSP benefits

Earnings on investments are tax-deferred while in the RDSP.

RDSP savings can be used by the beneficiary¹for any expense.

An RDSP beneficiary¹ may be eligible for a federal grant of up to $3,500 per year. A low-income beneficiary¹ may also be eligible for a federal bond of up to $1,000 per year. Grants and bonds are paid into the RDSP.

About the RDSP

Who can benefit from an RDSP?

Any person can be a beneficiary of an RDSP if they meet all of the following criteria:

Is eligible for the disability tax credit
Has a valid social insurance number

Is a resident of Canada
At the time the plan is entered into, has not and will not have turned 60 by the end of the year, except to transfer in an existing RDSP for the beneficiary

RDSP highlights at a glance (PDF, 1.2 MB) Opens a new window.

Who can open an RDSP?

An adult beneficiary can open an RDSP. If an adult beneficiary is not mentally capable, the legal guardian of property of the beneficiary or a qualifying family member of the beneficiary can open the RDSP.

In the case of a beneficiary who is a minor, a parent, both parents or a legal guardian of property can open and direct the RDSP. Once the beneficiary has reached the age of majority, if they are mentally capable, the beneficiary can become a holder along with the parent. If the holder was the legal guardian but not a parent, the mentally capable beneficiary — upon reaching the age of majority — replaces the legal guardian as the plan holder. Otherwise, the adult beneficiary’s legal guardian must become the holder.

A beneficiary can only have one RDSP at a time, except when transferring from one RDSP to another; the RDSP that is getting discontinued must be registered with the CRA. The issuer of the discontinued RDSP must transfer the assets or value of the assets to the new RDSP of the beneficiary when requested, and close the old RDSP promptly following the transfer.

Contribution rules

There is a $200,000 beneficiary lifetime contribution limit but there is no annual limit on contributions.
Contributions to an RDSP are not deductible for income tax purposes.
Assuming contribution and investment rules are followed, investment income, including interest, dividends and realized capital gains, earned in an RDSP will not be taxed in the plan.

Contributions are not allowed after the calendar year in which the beneficiary turns 59.
Contributions to an RDSP can be made by anyone with the written permission of the plan holder.

Based on net family income, contributions to the plan may also be eligible for Government of Canada assistance in the form of a Canada Disability Savings Grant (CDSG) and a Canada Disability Savings Bond (CDSB).

Learn more about the CDSG and CDSB.

Withdrawing from an RDSP

The payments must be made to the beneficiary, if they are alive, and there is no restriction on how the payments must be used.

When disability assistance payments are made from the plan to the beneficiary, the part of the payment that includes proceeds from any amounts rolled over to the RDSP (from an RESP or retirement funds), as well as the grants and bonds paid into the plan and all investment income earned in the RDSP, is taxable to the beneficiary.

For each $1 withdrawn from an RDSP, $3 of any CDSG or CDSB that were paid into the plan in the 10 years preceding the withdrawal must be repaid, up to a maximum of the total amount of CDSG and CDSB paid into the plan in the last 10 years.

Note: There is flexibility with withdrawals for people with shortened life expectancies (5 years or less).

Comprehensive information on withdrawal rules Opens in a new window.

Eligibility

Who can benefit from an RDSP?

Any person can be a beneficiary of an RDSP if they meet all of the following criteria:

Is eligible for the disability tax credit
Has a valid social insurance number

Is a resident of Canada
At the time the plan is entered into, has not and will not have turned 60 by the end of the year, except to transfer in an existing RDSP for the beneficiary

RDSP highlights at a glance (PDF, 1.2 MB) Opens a new window.

Opening an RDSP

Who can open an RDSP?

An adult beneficiary can open an RDSP. If an adult beneficiary is not mentally capable, the legal guardian of property of the beneficiary or a qualifying family member of the beneficiary can open the RDSP.

In the case of a beneficiary who is a minor, a parent, both parents or a legal guardian of property can open and direct the RDSP. Once the beneficiary has reached the age of majority, if they are mentally capable, the beneficiary can become a holder along with the parent. If the holder was the legal guardian but not a parent, the mentally capable beneficiary — upon reaching the age of majority — replaces the legal guardian as the plan holder. Otherwise, the adult beneficiary’s legal guardian must become the holder.

A beneficiary can only have one RDSP at a time, except when transferring from one RDSP to another; the RDSP that is getting discontinued must be registered with the CRA. The issuer of the discontinued RDSP must transfer the assets or value of the assets to the new RDSP of the beneficiary when requested, and close the old RDSP promptly following the transfer.

Contributing

Contribution rules

There is a $200,000 beneficiary lifetime contribution limit but there is no annual limit on contributions.
Contributions to an RDSP are not deductible for income tax purposes.
Assuming contribution and investment rules are followed, investment income, including interest, dividends and realized capital gains, earned in an RDSP will not be taxed in the plan.

Contributions are not allowed after the calendar year in which the beneficiary turns 59.
Contributions to an RDSP can be made by anyone with the written permission of the plan holder.

Learn more about the CDSG and CDSB.

Withdrawing

Withdrawing from an RDSP

The payments must be made to the beneficiary, if they are alive, and there is no restriction on how the payments must be used.

When disability assistance payments are made from the plan to the beneficiary, the part of the payment that includes proceeds from any amounts rolled over to the RDSP (from an RESP or retirement funds), as well as the grants and bonds paid into the plan and all investment income earned in the RDSP, is taxable to the beneficiary.

For each $1 withdrawn from an RDSP, $3 of any CDSG or CDSB that were paid into the plan in the 10 years preceding the withdrawal must be repaid, up to a maximum of the total amount of CDSG and CDSB paid into the plan in the last 10 years.

Note: There is flexibility with withdrawals for people with shortened life expectancies (5 years or less).

Comprehensive information on withdrawal rules Opens in a new window.

CIBC investment choices for RDSP:

CIBC Mutual Funds

Broad selection of mutual funds including savings, income and growth funds.

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CIBC Smart Investment Solutions

All-in-one investment selection that assists you by researching, monitoring and rebalancing your portfolio.

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Chequing account offer for RDSP beneficiaries

Eligible RDSP beneficiaries can get a CIBC Smart™ Account with monthly fee rebate and free Interac e-Transfer® transactions². Terms and conditions apply.^{Learn how to open a CIBC Smart Account. Opens in a dialog.}

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