Choosing a Financial Institution
Most people already have a financial institution with a savings or checking account . In opening an RDSP, the first thing to ask is: does your current financial institution offer the RDSP? If so, then your choice might be fairly easy.
If you do not yet have an account with a financial institution, or if your financial institution does not offer the RDSP, you will need to choose one. We recommend RBC as our preferred national RDSP provider.
Most major financial institutions are offering the RDSP—check www.disabilitysavings.gc.ca for updates on financial institutions.
Here are some questions to ask—our recommended answers will help you choose the financial institution best for you.
Is the financial institution easy to get to?
Is it near transit?
Is it accessible?
What are the hours?
What are the administrative or management fees?
Some financial institutions do not charge fees and others might. Ask if there is an administration fee, set-up fee and/or management fee. You may be willing to pay a fee, but if not, another financial institution might be better.
How much does it cost to move your RDSP to another financial institution?
You are allowed to move your RDSP from one financial institution to another, no matter what the reason. But, you might have to pay to do this. The fees tend to range from $25–$50.
What is their process for receiving contributions?
You need to know how your financial institution receives and deposits money into an RDSP. This is especially important if you are receiving disability benefits so that money does not enter your personal (savings or checking) account. Money into your personal account might be counted as income and can be clawed-back by government, where as money directly into your RDSP is not. You want a financial institution that takes direct deposits into your RDSP.
What are the rules around who manages the RDSP?
Some financial institutions may allow for joint holdership if you want some assistance from a friend or family member to manage your RDSP. Remember that if anyone but you is to be holder of your RDSP, they must be your legal representative. There are three types of legal representatives. You can appoint someone to manage your financial affairs with a Power of Attorney. In BC you can also appoint a Representative with a Representation Agreement. The other option is where an adult guardian is appointed, usually by a court.
What choices do you have to invest your RDSP?
Once you open your RDSP account, you will need to choose how to invest it. Investing your money well means that your money will grow! Some financial institutions will have a set investment plan that you must follow, where other banks will allow you to choose a plan.
There are usually advisors at financial institutions that will help you make good decisions on how to best invest your money depending on how old you are, how much money you have and how quickly you want to use it. Choose someone who gives you different options for investment and talk through these choices with them. Note that brokerages often offer better rates (lower fees) on their investment options.
What type of payments will the financial institution allow out of an RDSP?
Financial institutions are required to offer formula payments – when a set amount of money comes out regularly. However, you may want to take a large amount out to go on a trip, buy a car or put a down payment on a house. Not all financial institutions will allow you to do this. If you want to take out large amounts, you will need to make sure your financial institution allows this.
Tips for families & friends
The relationship with a financial institution is really important and should be a comfortable place for your friend or relative to do business.
If at all possible, assist your friend or relative to open their RDSP account. You can help them establish a relationship with their banker and be on hand to ask questions regarding fees, investment options and payments.