The Registered Disability Savings Plan (RDSP) was created by the federal government about fifteen years ago and has since been overshadowed by RRSPs and RESPs, although its performance is vastly superior to them: after all, Ottawa promises to contribute up to $10,000 opening, with no further down payment, only to add another $10,000 in subsequent years. Montreal youngster Terry intends to turn the spotlight on this little-known and under-used investment.
In Quebec, 16% of the population suffers from some form of disability or disability that allows them to qualify for an RDSP. This does not apply to parents of disabled children, who could also participate in such a savings plan. The down payment doesn’t have to be huge, as the federal government promises to deposit $1,000 per year for ten years, in addition to retrospectively depositing the first $10,000 for the ten years prior to opening the account.
If the saver decides to invest part of his savings there, the state can double, triple or even quadruple the investment, which ensures a return that no form of investment can guarantee. But like any other savings plan, the RDSP also allows you to invest that amount in different types of investments, which can improve its performance a bit.
After that, the RDSP holder can get their money back – including interest and government support – regardless of their health status.
“But the vast majority of people, even those affected by this austerity plan, do not know that it exists,” laments Michel-Alexandre Riendeau. In fact, only 32% of eligible individuals currently contribute to an RDSP. The Quebec entrepreneur and software developer has decided to work with two financial planners to create the Terry web platform, which they hope will encourage more Quebecers to contribute to an RDSP.
“The name Terry is a reference to Terry Fox,” he explains Have to Michel Alexandre Riendeau. “We chose this name because it humanizes our platform and RDSP a bit. »
Terry is not quite an online brokerage platform like Desjardins’ Disnat or Wealthsimple. Rather, it is a website that allows Quebec residents who have a disability or handicap to contact an advisor and then complete, in the most automated way possible, all the forms required to open an RDSP account.
Terry then relies on his managers, duly authorized by Quebec’s financial authorities, to increase those savings. Launched in September 2021, the firm expects its assets under management to exceed $10 million before year-end. To give an idea of what the government support represents, about 5 of that $10 million comes from the government. The remainder includes the money invested and the returns on their investments by the approximately 800 families who are Terry’s clients.
“Fuzzy” Eligibility Criteria
Terry isn’t the only financial company offering an RDSP. Most of the institutions represented in Quebec do likewise. According to its own statements, the young scion stands out by offering an online service that saves people with possibly restricted mobility the trip to a consultation. Everything is done remotely.
The RDSP is not only aimed at people with physical or even severe disabilities. The eligibility criteria for this plan are such that people with health conditions that do not necessarily prevent them from pursuing regular employment can participate. This is the case, among others, for people suffering from type 1 diabetes, says Michel-Alexandre Riendeau.
“There’s no reason not to open an RDSP if you’re eligible, but sometimes you run into people who are proud to refuse,” he says. Even parents who have a child in difficulty can contribute to such a plan, which they are usually not aware of. “Those who meet us wonder why they didn’t contribute to this program sooner. »
Apparently, this lack of information is an interesting business opportunity for Terry, who hopes to expand her ministry across Canada in the coming months. Since the RDSP helps people who may need it more than others, it is also useful work that the young company is doing. These financial sharks, as the saying goes, must not bite…