The Registered Disability Savings Plan (RDSP) was created by the federal government about fifteen years ago and has since remained in the shadow of RRSPs and RESPs, even if its performance is far superior to them: after all, Ottawa promises to deposit up to $10,000 at the opening, without any other down payment, then to add an additional $10,000 in the following years. Montreal youngster Terry intends to shine the spotlight on this little-known and underused investment.
In Quebec, 16% of the population suffers from one form or another of handicap or disability that allows them to qualify for an RDSP. This does not include parents of disabled children who could also contribute to such a savings scheme. The down payment does not have to be huge, since the federal government promises to deposit $1,000 per year over ten years, in addition to retroactively depositing a first $10,000 for the ten years preceding the opening. Account.
If the saver decides to invest part of his savings there, the government can double, triple or even quadruple the stake, which ensures a return that no form of investment can guarantee. But like any other savings plan, the RDSP still allows you to invest this amount in different forms of investments, which can improve its performance even a little more.
Afterwards, the RDSP holder can recover their money — including interest and government assistance — regardless of their state of health.
“And yet, the vast majority of people, even those targeted by this savings plan, are unaware that it exists,” laments Michel-Alexandre Riendeau. In fact, only 32% of eligible people currently contribute to an RDSP. The Quebec entrepreneur and software engineer has decided to partner with two financial planners to create the Terry web platform which they hope will lead more Quebecers to contribute to an RDSP.
“The name Terry is a nod to Terry Fox,” explains the To have to Michel-Alexandre Riendeau. “We chose this name because it humanizes our platform and the RDSP a bit. »
Terry is not quite an online brokerage platform like Disnat from Desjardins or Wealthsimple. Rather, it is a website from which residents of Quebec suffering from a disability or handicap can get in touch with an advisor, to then complete in the most automated way possible all the forms necessary to open an RDSP account.
Terry then relies on his managers duly authorized by the financial authorities of Quebec to grow these savings. The company, founded in September 2021, expects its assets under management to be worth more than $10 million before the end of the year. To give an idea of what the government assistance represents, about 5 of that $10 million comes from the government. The remainder includes the money invested by the approximately 800 families who are Terry’s clients and the return earned on their investments.
“Fuzzy” eligibility criteria
Terry isn’t the only financial company to offer an RDSP. Most of the institutions present in Quebec also do so. The young shoot says it stands out by offering an online service that saves people whose mobility may be reduced from having to travel to meet with an advisor. Everything is done remotely.
And yet, the RDSP does not only target people with physical or even severe disabilities. The eligibility criteria for this plan are such that people with health problems that do not necessarily prevent them from having regular employment can join. This is among others the case of people who have developed type 1 diabetes, says Michel-Alexandre Riendeau.
“There’s no reason not to open an RDSP if you’re eligible, but sometimes you come across people who refuse to do so out of pride,” he says. Parents who have a child in difficulty can also contribute to such a plan, which they are unaware of for the most part. “Those who meet us wonder why they did not contribute to this scheme sooner. »
Obviously, this lack of information is an interesting business opportunity for Terry, who hopes to extend her service to all of Canada in the coming months. Since the RDSP helps people who may need it more than others, it’s also kind of useful work that the young company does. These financial sharks, as the expression goes, must not bite very hard…