RDSP projection.
RDSP balance
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CDSG (grant)
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CDSB (bond, if eligible)
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Your breakdown
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The most generous match in Canadian savings
The Registered Disability Savings Plan is built for a beneficiary who qualifies for the Disability Tax Credit, and it pays out government money on a scale nothing else in the system comes close to. Two streams stack on top of your own contributions. The Canada Disability Savings Grant matches what you put in, and the Canada Disability Savings Bond pays into the plan even if you contribute nothing. This calculator projects the plan balance by combining your contribution, the grant you earn, the bond if you qualify, and tax deferred compounding at the return you choose.
How the grant and bond actually work
For a beneficiary in the lower and middle income range, the grant pays 300 percent on the first $500 contributed each year and 200 percent on the next $1,000. Put in $1,500 and the grant tops out at $3,500, which is the annual grant cap. Above those income levels the match drops to 100 percent on up to $1,000. The grant has a lifetime ceiling of $70,000. The bond is separate and needs no contribution at all: a qualifying low income beneficiary receives up to $1,000 a year, lifetime limit $20,000. The tool applies the full low income schedule when you tick the box, and the 100 percent match otherwise.
Fifteen years of a $1,500 contribution, low income stream
Picture a beneficiary whose family income sits in the low range, contributing $1,500 every year for 15 years at a 5 percent return. Each year the $1,500 draws the maximum $3,500 grant and the $1,000 bond, so $6,000 lands in the plan annually before any growth.
You contributed $22,500 of your own money and the plan grew to roughly $135,945. The government put in three dollars for every one of yours, and compounding did the rest.
The ten year rule you cannot ignore
Grants and bonds come with a repayment string. If money is withdrawn from the plan, any grant or bond received in the previous ten years must be repaid to the government under what is called the assistance holdback amount. Pull funds early and you can claw back tens of thousands in government contributions. There is also a carry forward feature worth knowing: unused grant and bond entitlements accumulate from the year the beneficiary became DTC eligible, back to 2008 and up to ten years, so a late starting plan can catch up by contributing more in a single year. This calculator models a steady annual contribution and does not simulate catch up years or holdback repayment, so plan withdrawals with an advisor.
Who benefits and the mistake to avoid
This is for parents, guardians, or the beneficiaries themselves once a Disability Tax Credit certificate is in place. The single most expensive mistake I see is leaving the grant on the table. A family that contributes only $500 a year captures the 300 percent tier but misses the 200 percent tier entirely. Stretching to $1,500 a year for a low income beneficiary is the difference between $1,500 and $3,500 of free grant annually. If cash is tight, prioritize the first $1,500 of contributions above almost any other savings goal, because no market return competes with a guaranteed 233 percent blended match.
Does an RDSP affect provincial disability benefits?
In most provinces, no. RDSP assets and the income drawn from the plan are generally exempt when provinces assess eligibility for income assistance and disability support programs, which is by design so the plan does not penalize the people it is meant to help. Rules vary slightly by province, so confirm with your provincial program, but the federal intent is that an RDSP should sit outside the asset and income tests that govern those benefits.
How are RDSP withdrawals taxed?
Your own contributions come out tax free because they were made with after tax dollars. The grant, bond, and all investment growth are taxable to the beneficiary in the year of withdrawal. Because many beneficiaries have low taxable income and can apply the Disability Tax Credit and basic personal amount, the actual tax on those withdrawals is often very small or nil. That favourable tax position at withdrawal is part of what makes the plan so powerful.