RDSP (Registered Disability Savings Plan)

What it means

A Registered Disability Savings Plan is a registered account designed to help a person with a severe and prolonged disability build long-term savings. Contributions aren't tax-deductible, but growth inside the account is tax-deferred, and the government can add grant and bond money directly into the plan — often far more than what was contributed.

Why it matters

The government grants and bonds available through an RDSP (see CDSG and CDSB) are some of the largest matching incentives in Canadian personal finance, which is why opening one as early as possible, even with small contributions, is usually worth doing well before it feels urgent.

Common misunderstandings

• •Opening an RDSP requires Disability Tax Credit approval first — it isn't optional paperwork, it's the eligibility gate.
• •Money doesn't have to come from the beneficiary — a parent, grandparent, or other family member can contribute with the plan holder's permission.
• •Withdrawing money too early can require repaying some of the grants and bonds received in the previous 10 years.

Where you'll see it

In any conversation about long-term savings for a person with a disability, and increasingly recommended once someone is approved for the Disability Tax Credit.