Registered Disability Savings Plan (RDSP) Guide 2025

Updated March 2025 • 11 min read

The Registered Disability Savings Plan (RDSP) is one of the most valuable and underused financial tools available to Canadians with disabilities. The federal government contributes thousands of dollars in grants and bonds — for free — to qualifying plans. Here is everything you need to know.

What Is an RDSP?

An RDSP is a long-term savings plan designed to help Canadians with disabilities and their families save for the future. It works similarly to an RRSP or RESP: contributions grow tax-sheltered, and the government contributes additional amounts through grants and bonds.

Who Qualifies?

To open and contribute to an RDSP, the beneficiary must:

• Be a Canadian resident
• Have a valid Social Insurance Number (SIN)
• Be approved for the Disability Tax Credit (DTC)
• Be under age 60 (to still qualify for government grants/bonds; the plan can be opened until age 59)

If you lose DTC eligibility, you have a grace period (up to 5 years) to continue the plan. If DTC is not renewed by the end of the grace period, the plan must be closed.

Who Can Open and Contribute?

The RDSP holder (plan holder) is typically the beneficiary if they are an adult. For minors, a parent or legal guardian is the plan holder. Others (family, friends) can contribute to an RDSP with the plan holder's consent, but the total annual contribution from all sources is subject to the lifetime limit.

Contribution Limits

• Lifetime contribution limit: $200,000 per beneficiary (no annual limit)
• There is no annual contribution limit — you can contribute as much as you like in a given year, up to the lifetime limit
• Contributions are not tax-deductible (unlike RRSPs)

Canada Disability Savings Grant (CDSG)

The federal government matches your RDSP contributions through the Canada Disability Savings Grant. The matching rate depends on your family income:

For families with income at or below $111,733 (2025):

• 300% match on the first $500 contributed = up to $1,500 in grants
• 200% match on the next $1,000 contributed = up to $2,000 in grants
• Maximum CDSG per year: $3,500

For families with income above $111,733 (2025):

• 100% match on the first $1,000 contributed = up to $1,000 in grants
• Maximum CDSG per year: $1,000

The CDSG lifetime limit is $70,000 per beneficiary. Unused grant room can be carried forward for up to 10 years (with a maximum of $10,500 in grants catchable in one year). Grants are paid directly into the RDSP account.

Canada Disability Savings Bond (CDSB)

The Canada Disability Savings Bond is paid to low- and modest-income RDSP holders with no contributions required — simply opening the account and qualifying is enough to receive the bond.

• Full bond ($1,000/year): Family income at or below $36,502 (2025 threshold)
• Partial bond: Family income between $36,502 and approximately $55,000 (phases out)
• No contributions required to receive the bond
• Lifetime bond limit: $20,000 per beneficiary
• Bond room can also be carried forward up to 10 years

Low-income beneficiaries who have never opened an RDSP should do so immediately — they may be eligible for up to $11,000 in retroactive bonds in the first year (current year plus 10 years of carry-forward).

Investment Options Within an RDSP

Like an RRSP or TFSA, the money inside an RDSP grows tax-sheltered. It can be invested in GICs, mutual funds, ETFs, stocks, bonds, and other eligible investments depending on your financial institution. Investment returns are not taxed inside the plan.

Withdrawals: Disability Assistance Payments (DAPs)

You can withdraw from your RDSP at any time through a Disability Assistance Payment (DAP). However, there are important rules:

• Holdback rule: If government grants or bonds were received in the past 10 years, withdrawals trigger a clawback of $3 of grants/bonds for every $1 withdrawn (up to the total grants and bonds received in the past 10 years)
• This clawback is why RDSPs are designed as long-term plans — the "holdback period" shrinks as time passes from when grants/bonds were received

Lifetime Disability Assistance Payments (LDAPs)

Once you turn 60 (or earlier if the plan is in "primarily government-assisted" status), you must begin receiving Lifetime Disability Assistance Payments (LDAPs) annually. The minimum annual payment is determined by a formula. LDAPs are taxable income to the beneficiary in the year received.

Tax Treatment

• Contributions: not tax-deductible
• Growth inside the plan: tax-sheltered
• Withdrawals: the portion attributable to grants, bonds, and growth is taxable income to the beneficiary; the portion representing original contributions is returned tax-free

How to Open an RDSP

1. Confirm DTC eligibility — apply using Form T2201 if not already approved
2. Choose a financial institution that offers RDSPs (most major banks, some credit unions and brokerages)
3. Provide the beneficiary's SIN, DTC approval, and identification
4. Complete the RDSP application and grant/bond application forms (often done simultaneously)
5. Begin contributions to start receiving CDSG matches

Planning Considerations

• Open an RDSP as early as possible — the earlier grants and bonds are received, the sooner the 10-year holdback period begins
• Even a small annual contribution maximizes the grant for lower-income families
• Family members can contribute to an RDSP as a gift — very valuable for low-income beneficiaries who can't contribute themselves
• The RDSP can continue after the holder loses DTC eligibility for a grace period — consult your financial institution if eligibility is uncertain