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moneysense.ca, 17/02/09
RDSP accounts are now available
Current issue:
When I first wrote about the Registered Disability Savings Plan (RDSP), it was not possible to take advantage of the Canada Disability Savings Grants (CDSG) because none of the financial institutions offered RSDP accounts. Today two banks offer RSDP accounts: Royal Bank and Bank of Montreal.
Bank of Montreal’s RDSP accounts have been available for a while now and you can learn about how to open an account and get application forms from their website. Royal Bank only recently announced the availability of these accounts and the press release accompanying it has further information on setting up an account.
Note that the deadline for contributing to a RDSP account and getting the matching grants for 2008 has been extended to March 2, 2009. Useful information on saving for a disabled person is available on the Planned Lifetime Advocacy Network (PLAN) website. PLAN has also set up another website devoted exclusively to the RDSP program. Rob Carrick recently wrote a column calling RDSPs “worthy but overlooked”.
moneysense.ca, 17/02/09
This is a great topic to write about CC and I’m glad that RY and BMO are taking the lead in offering these accounts.
RDSP’s aren’t likely to receive a lot of attention vs. RESP’s, TFSA’s or RRSP’s but they are equally important to many families who care for a child with a disability.
There are significant financial burdens that families face for the future care of children and this product is likely long overdue in Canada. It provides an incentive for parents/caregivers to provide some financial certainty in the future.
If readers know of individuals who could utilize this type of account than resources should be shared so that they are able to take advantage of the program.
Unrelated to post but CC I wanted to thank you for mailing the book I won to me, I received it yesterday. Thanks again.
I hadn’t heard of RDSP’s. One of my big worries has been what to do if my fiance and I have a child with a disability. This is definitely a start to easing my concerns.
Way to be on the ball CC!
Yes, way to be on the ball CC. As you know I’m in the financial services sector and there’s 0 news out there about this. I found out about it here, not from within ‘the industry’.
Not only can it be used for children with a disability. My spouse had a disabling accident two years ago. We are using the RDSP to save up for adaptive technology, home care or heck, maybe even early retirement! It’s nice to have a little nest egg in case I can’t always be around to help out.
With our income level we only qualify for a max $1000 grant each year, so we’ll end up with $2k/year (half from us, half from gov’t). Our strategy will be to put half into GIC’s and half into an index fund. I’d love to hear other comments about how other people plan to use the RDSP (if anyone is in that situation).
Wait, I’m not done yet. Sorry for multiple posts.
I was quite disappointed to find that only two of the big banks are actually offering RDSP accounts. We checked at TD and the Personal Banker we spoke to said “You must be thinking of a TFSA, there isn’t anything like that.”
Don’t get me wrong, I’ve had great experience with TD in the past, and would have gladly opened an RDSP there if they had bothered to make one or… tell their employees it actually exists!
Anyhow, top marks to CC for being on top of a great new product. I look forward to more RDSP posts in the future.
While the RDSP is a great tool for families with disabled children I have to chime in that I’m actually disappointed with the RDSP atleast from my own perspective.
I have a child with a registered disability. The down side to this program is it is only useful if you are basically permanently disabled for life. If you recover from your disability the account is closed and the matching contributions are clawed back.
In my case my son has a severe speech disorder that had made learning to talk much more difficult for him. With intense speech therapy and a specialized preschool he is catching up and will no longer qualify as disabled, he still has other physical issues and will likely have a life time of learning issues. Don’t get me wrong, we’re thrilled he is recovering. But it sure would have been nice to if we could have used the matching contributions of an RDSP to offset the expenses associated with his condition.
Hopefully with time the RDSP will reduce restrictions similarly to how the RESP started but wasn’t widely accepted until it became more flexible.
[...] Canadian Capitalist points out that RDSP Accounts are now available, which is an important new savings vehicle with loved ones and dependants who are [...]
All the recent advertising on RDSPs says that in order to receive the 2009 grant/bond, an RDSP must be opened by December 31, 2009. However, I just spoke to TD Canada Trust and learned that it takes 5 days for the bank to process an RDSP account so anyone who had hoped to benefit this year has missed the boat.