The Registered Disability Savings Plan (RDSP) was created by the federal government fifteen years ago and is in the shadow of RRSPs and RESPs, although its performance is far superior to them: after all, Ottawa guarantees deposits of up to $10,000. At the start, with no other down payment, to add an additional $10,000 in subsequent years. Montreal teenager Terry hopes to shine a spotlight on this little-known and untapped investment.
In Quebec, 16% of the population has some form of disability or impairment that makes them eligible for the RDSP. It also excludes parents of disabled children who can contribute to such a savings scheme. The down payment doesn’t have to be huge, as the federal government promises a deposit of $1,000 per year over ten years, plus the first $10,000 for the ten years prior to commencement.
If a saver decides to invest a portion of his savings there, the government can double, triple or quadruple the stake, ensuring a return that is not guaranteed on any investment. But like other savings plans, RDSP still allows you to invest this amount in different types of investments, which further enhances its performance.
After that, the RDSP holder can get their money back, including interest and government assistance, irrespective of their health status.
“Furthermore, many people, even those targeted by this savings scheme, do not know it exists,” laments Michel-Alexandre Rindeau. In fact, only 32% of eligibles contribute to RDSP at present. Quebec entrepreneur and software engineer Terry decided to partner with two financial planners to create a web platform that they hope will lead to more Quebecers contributing to the RDSP.
Explains “The name Terry is a nod to Terry Fox.” to have Michel-Alexandre Riendeau. “We chose this name because it somewhat humanizes our platform and RDSP. »
Terry is not an online brokerage platform like Disnat from Desjardins or Wealthsimple. Instead, it’s a website where Quebec residents with a disability or disability can contact an advisor, and then have all the forms needed to open an RDSP account be completed in a highly automated manner.
Terry relies on his managers, duly authorized by the Quebec fiscal authorities, to raise these savings. Founded in September 2021, the company expects its assets under management to exceed $10 million before year-end. To give an idea of what government aid represents, 5 of that $10 million comes from the government. The remainder consists of money invested by approximately 800 families who are Terry’s clients and the returns on their investments.
“Fuzzy” eligibility criteria
Terry is not the only financial institution offering RDSP. Many firms based in Quebec are doing so as well. Young Shute says it stands out by offering an online service that protects people with dementia without having to travel to see a counselor. Everything is done remotely.
Furthermore, RDSP does not only target people with physical or severe disabilities. The eligibility criteria for this plan is that people with health problems that do not prevent them from getting regular employment can join. This is especially true for people who have developed type 1 diabetes, says Michel-Alexandre Rindeau.
“There is no reason not to open an RDSP if you are eligible, but sometimes you come across people who refuse to do so out of arrogance,” he says. Even parents who have struggling children can contribute to such a plan, which most of them are not aware of. “Those who meet us wonder why we didn’t join the scheme sooner. »
Obviously, this lack of information is an interesting business opportunity for Terri, who hopes to expand her services across Canada in the coming months. As RDSP helps people who need it more than others, it is also a useful thing for a young company to do. These financial sharks, as the expression goes, shouldn’t bite too hard…