The implementation of the new Registered Disability Savings Plan (RDSP) offers new tax efficient savings opportunities for individuals who are disabled or have a family member with a disability.

Although the Registered Disability Savings Plan (RDSP) was announced in the 2007 federal budget, the necessary changes to make it a reality were not implemented until late in 2008. For consumers who wished to invest in these Plans, they had until March 2, 2009 to take advantage of the Disability Tax Credit for 2008. The new contribution year began March 3rd, 2009.

The RDSP was modeled on the Registered Education Savings Plan, rather than the Registered Retirement Savings Plan (RRSP). This means contributions are not tax deductible but any investment income and capital gains grow on a tax deferred basis while the funds remain in the Plan. An important difference between RDSPs and RRSPs is that while consumers may, and often do, have multiple RRSPs, only one RDSP plan per beneficiary is permitted.

As of our publication date, only 3 national financial institutions were offering RDSPs - the Bank of Montreal, the Royal Bank of Canada and CIBC. It is important in choosing a Plan that you understand the differences amongst them so to choose the one most suitable to meet your long-term financial goals. For example, BMO and RBC offer a variety of investment options, while CIBC offers their Plan through CIBC Securities which limits the investments to their mutual fund offerings only. More financial institutions are expected to offer RDSPs later this year.

More complete information on RDSPs is available on various websites.

Here are a few:

• RDSP Canada
• Human Resources and Skills Development Canada, or toll free 1-800-O-Canada
• Canada Revenue Agency