Kevin Cahill, certified financial planner with Canadian Legacy Builder in Guelph, isn’t surprised by this obstacle, adding that banks don't priortize products that don’t make money.
“Most of the people that qualify for an RDSP are not the customers the banks are going to be selling insurance or mutual funds to,” says Kevin Cahill. “All you have to do is follow the numbers. The banks control a lot of money in the country and they’re trying to sell the products that have the ability to drive revenue.”
RDSPs – introduced in Canada in 2008 – are the first savings plans in the world designed to provide financial security specifically to the people with disabilities. Similar to Registered Education Savings Plans (RESPs), contributions are not tax deductible, but any income generated is tax-sheltered until the funds are withdrawn.
Once an RDSP is set up, any individual can contribute money as long as consent is provided by the account holder. Beneficiaries – who must be under 60 years of age, Canadian with a social insurance number and eligible for the disability tax credit – are also entitled to income-dependent, federal grants and savings bonds. These provide up to $4,500 annually in direct assistance, to a lifetime limit of $90,000. (continued on Page 3.)