The beneficiary

• is a Canadian resident
• has a SIN number
• is DTC-eligible
• is under the age 60

Holder(s):  

• is the age of majority
• has a SIN # or a business# (organization)
• is a legal parent (if the beneficiary is a minor) or has legal authority to act on the behalf of the beneficiary

          Note: the holder doesn't have to reside in Canada.

STEP #2 - Gathering information (to be provided during the interview)

For the beneficiary

• the SIN number
• Name & address, phone#,
• Date of birth
• Sex

For the holder(s):

• SIN number
• Name & address, Phone #
• Relationship to beneficiary
• BMO account number (if there is one)

STEP #3 - Set up a customer profile with BMO

• If the holder(s) is an existing customer of BMO then the profile is already exists.
• If not an existing customer of BMO, then visit the nearest local branch to have the profile created. Two IDs will be required to be presented. This step could be postponed, but having the customer profile already set up at the time of opening the RDSP account will speed up the process and make the agent's work easier.

STEP #4 - Get hold of the applications forms

• by calling the BMO IC call center at 1-800-665-7700
  (If you bat a busy signal just keep trying. Once you get into the queue, be prepared to wait, it might be an hour or even longer) An agent will send the forms to you via e-mail, fax or regular mail.
• or downloading them from this website. You need to fill out two forms, one for opening the account and the second one to apply for the bonds and/or the grants. The forms are available in both official languages. There are two diffrent forms for bond/grant applications; one for when the beneficiary is under 18, and the second one when he/she is 18 or over.
  
  

  Application froms to open an account:
  BMO RDSP Form English.pdf 
  BMO RDSP Form French.pdf

  Application for Grants and Bonds above 18:
  Government CDSG and CDSB application above 18 English.pdf

  Government CDSG and CDSB application above 18 French.pdf
  
  

  Application forms for Grants and Bonds under 18:
  Government CDSG and CDSB application under 18 English.pdf

  Government CDSG and CDSB application under 18 French.pdf

STEP #5 Fill out the forms - with the help of an on-line agent -

• by calling the BMO IC call center at 1-800-665-7700 (again)

STEP #6 Sign and send the forms back to the agent:

• via fax: 416-927-3511 or 1-888 - 840 - 2817
  
• by mail:
  BMO Investment Center
  55 Bloor Street West
  9th Floor
  Toronto, ON, M4W 3N5

STEP #7 - Make the family contribution of the amount previously indicated (if any) ,

• Deposit the monies into the account as instructed by the BMO agent

Contributions made on or before March 2, 2009 will be considered for 2008 Grants. These Grants will not be included in 2009 Grant limits.

Bond applications made on or before March 2, 2009 will be considered for Bonds in 2008, 2009, and in future years.  The Bond, once paid, will continue to be paid automatically in subsequent years if the Beneficiary remains eligible. Unless there is a change in personal information or the beneficiary turns 18, only one application is needed for the Bond.

Applications for 2009 Grants will be accepted starting on March 3, 2009.

Full exemption:
British Columbia, Alberta, Manitoba, Saskatchewan, Ontario, Newfoundland & Labrador and Yukon,

Partial exemption:
Quebec , New Brunswick, Prince Edward Island, Northwest Territories

if the beneficiary is a minor

• The legal parent(s),
• The guardian of the beneficiary; a person or an organization that has been appointed as the guardian of the beneficiary

if the beneficiary reached the age of majority:

• The beneficiary, if has legal capacity to enter into a contract
• The guardian of the beneficiary; a person or an organization that has been appointed as the guardian of the beneficiary
• Any other individual (parents included) who is legally authorized to act on behalf of the beneficiary,
• A public department, agency or institution that is legally authorized to act on behalf of the beneficiary,

The holder must have a SIN number or a business number, if it is an organization.

Note:

1. The age of majority varies by province; in some it is 18, in others it is 19.
2. In most cases a person after reaching the age of majority is considered to have the legal capacity to enter into a contract unless proven otherwise and/or prevented by law.
3. The parents of person who reached the age of majority can be the holders of the plan only if they are appointed as guardians or have legal authorization to act on the behalf of the beneficiary or they have been holders of the plan previously.
4. There can be several holder (eg. both parents, the beneficiary and the parents) , but each has to meet the conditions required to qualify as a holder of the plan
5. The simplest way to get legal authorization is by way of Powers of Attorney, or similar mechanism that is available in most provinces.

6. A holder who is not the beneficiary of the plan does not have to be a resident of Canada but must have a valid Social Insurance Number or Business Number (for public institutions, departments and agencies) in order to establish the plan.

    

• If the holder(s) is an existing customer of BMO then the profile is already exists.
• If not an existing customer of BMO, then visit the nearest local branch to have the profile created.  Two IDs will be required to be presented.  This step could be postponed, but having the customer profile already set up at the time of opening the RDSP account will speed up the process and make the agent's work easier.

~ - ~ - ~

FMOQ - Fédération des médecins omnipraticiens du Québec (Quebec Federation of General Practitioners) is also offering RDSP plans on behalf of the Desjardins Trust company.  (Québec residents only).

 ~ - ~ - ~

When opening an account and selecting investment types, special attention should be paid not to only to the interest they return, but to any fees or charges applied, penalties to be paid on changing investment types and/or transferring the plan to other financial institution in the future

BMO allows only the following BMO products to be placed into the RDSP Trust Plan:

• Savings account- usually pays less than 1% interest and there might be monthly/Transaction fee associated with it 
• Garantied Investment Cetificates (GICs):
  - Minimum investment : $1,000
  - Term: 1-7 years
  - both cashable and non-cashable
  - compounded yearly interest 1-3%|
  - learn more about GICs at BMO
• Mutual Funds:
  - minimum investment $500-1,500
  - higher potential return then with GICs, but with greater risk, as well
  - learn more about mutual funds at BMOs

Any person who:

• is eligible for the DTC - Disability Tax Credit - (approved by the CRA) 
  You may open an RDSP account before receiving approval for DTC eligibility, but the approval must be received for the particular year, before the plan can be registered
• is under age 60
• is a Canadian resident and
• has a SIN#

The holder of the plan or anyone - family members, friends, strangers and even the beneficiary - with the written consent of the plan holder.

It is expected that most major financial institutions will be offering RDSPs. As of today (Feb 27, 2009) the only major financial institutions that are accepting applications are:

• the Bank of Montreal (BMO),
• the Royal Bank of Canada (RBC) and
• the Canadian Imperial Bank of Commerce (CIBC).

• is eligible for the Disability Tax credit and has been approved by Revenue Canada Agency (CRA)
• has a SIN number.
• if the beneficiary over 18, the holder of the plan, if other than the beneficiary him/herself, has legal authority to manage the beneficiary's financial affairs.  This applies even if the holder(s) is the legal parent of the beneficiary.

Get informed about the RDSP.

The assistance holdback amount is the total of Canada Disability Savings Grants (CDSGs) and Canada Disability Savings Bonds(CDSBs) paid into the plan (or into any prior RDSP of the beneficiary) in the immediately preceding 10-year period, less any amount of CDSGs or CDSBs paid in that 10-year period that has been repaid to the government.

The assistance holdback amount is the amount that will have to be repaid if: 

• the RDSP is terminated 
• the RDSP no longer qualifies to be an RDSP 
• a disability assistance payment is made from the RDSP 
• the beneficiary ceases to be a DTC-eligible individual, or
• the beneficiary dies

The amount that would have to be repaid as the result of one of the above occurrences is the lesser of: 

• the assistance holdback amount immediately before the occurrence, or 
• the fair market value, immediately before the occurrence, of the property held by the RDSP

• Bond applications made on or before March 2, 2009 will be considered for Bonds in 2008, 2009, and in future years. The Bond, once paid, will continue to be paid automatically in subsequent years if the Beneficiary remains eligible.
• All contributions made before March 2, 2009 will be eligible for 2008 Grants, provided a Grant application was completed when the RDSP was opened. These Grants will be included in 2008 annual limits.
• All contributions made between  March 2 and December 31, 2009 will receive 2009 Grants. These Grants will be included in 2009 annual limits. 
• Once Grants application made, Grants will be paid when a contribution is made. 

$1,000 – [$1,000 × (A – B) / (C – B)]      where

A is the adjusted income for the year; 
B is $21,229 and 
C is $37,884.

If the beneficiary:

1. has reached the age of majority, that is at least 18 years of age on December 31 of the year preceding the particular year, then the family income is the income of the beneficiary's and his/her spouse.
2. is a minor - has NOT reached the age of majority
   • then the family income is that of the qualified dependent of beneficiary (in most cases the legal parents) whose adjusted income used to determine the amount of a child tax benefit in respect of January in the particular year, or
   • a person (other then the legal parents) in respect of whom a special allowance under the Children’s Special Allowances Act is payable for at least one month in the particular year;

For the purpose of calculating the RDSP bonds and grants, the family income used is based on information from the tax return on file at the CRA for the second preceding year.  If no tax return has been filed for that year then the income is assumed to be over the maximum limit.

• Saving Accounts
• GICs - are invested for a single specified term and interest rate with a fixed maturity date.  The compound interest feature is the most popular option. Interest rates for new deposits are normally fixed at the time the deposit is made.
  Normally institutions do not charge a fee to administer GIC however transfer out fees ranging from $10.00 to $80.00 are often deducted by the releasing institution if the RDSP is transferred elsewhere at maturity.
• Indexed Linked GICs: These are a variation on the GIC RRSP in that the investment is for a fixed period of time with a set maturity date and may contain some type of guaranteed return for the investment period.
  The main difference is that the investor also has the opportunity to participate in the growth of a specified stock index such as the S&P/TSX 60 or S&P 500 or a combination of indices up to a preset limit which can be the full index gain or a percentage thereof. At maturity the investor will receive back the original invested capital plus the guaranteed return or the original capital plus the index return up to the preset limit, whichever is higher. The deposit is also covered by the applicable deposit insurance. Normally, a trustee fee is not charged to administer these plans however, like GIC RDSPs a transfer out fee ranging from $10.00 to $80.00 may be charged.
• Mutual Funds: RDSP funds can be deposited in one or more of the mutual funds offered by an institution. Investors should become familiar with such terms as book value and its impact on your expectations. Mutual funds are security items and are not covered by any form of deposit insurance. Fees on mutual fund RRSPs include sales commissions which can be paid at the time of purchase or on a declining redemption schedule, management fees which are paid to the fund manager who actually invests the money, trustee fees which may or may not be absorbed by the fund company and partial withdrawal or transfer out fees.

Other type investments the might be offered are bonds, stocks and mortgages.

There are often annual trustee fees, which can range from nil up to $150.00. Other fees can include transaction fees, and withdrawal or transfer fees.

The following is a list of the more common RRSP eligible investments that might be offered by an financial institution. It is expected that the list of RDSP eligible investments will be similar but most likely just a subset of this.This not intended to be exhaustive list: 

• Savings accounts 
• GICs
• Stocks traded on prescribed Canadian stock exchanges
• Stocks on prescribed foreign stock exchanges
• Stocks of some Canadian companies not listed on prescribed stock exchanges
• Federal Government Bonds
• Provincial Bonds
• Corporate Bonds
• Strip Bonds
• Strip Coupons
• Canada Savings Bonds
• Canadian Mutual Funds
• Canadian Real Estate Investment Trusts (REIT)
• Mortgages secured by Canadian property
• Royalty trusts/Income Trusts
• Shares of Canadian controlled Labour Sponsored Funds
• Some Limited Partnership units 

The Rate of Return on your investment depends on many factors, some of them are:

A/(B - C + 3)                where variable

• A is the fair market value of the plan’s assets. (However, if the plan holds a “locked-in” annuity, that annuity is disregarded in determining the value of the plan’s assets.
• B is the life expectancy of the beneficiary
• C is the age of the beneficiary

The life expectancy used in most cases is the one that is published by Statistics Canada for Canadian residents with two exceptions:

• If the beneficiary has survived beyond the life, then the beneficiary’s life expectancy for that year is defined to be the beneficiary’s age at the beginning of that year. This means that the limit on lifetime disability assistance payments for that year is one-third of the value of the plan’s assets at the beginning of the year.
• If a director of the plan provides the issuer of the plan with written certification from a medical doctor that the beneficiary’s life expectancy is shorter than that determined in the general manner described, the beneficiary’s life expectancy  is the age to which the beneficiary can be expected to live based exclusively on that certification.

• the beneficiary dies
• the beneficiary disqualifies for DTC or
• the plan is deregistered

When the beneficiary is over 18 then the holder(s) of the plan, if other than the beneficiary, must have either guardianship or legal authority to act on the behalf of the beneficiary in financial matters. 

It can be accommodated by use of the continuous Power of Attorney for property or representation agreement for property.  In some of the provinces the term enduring is used instead of continuous.

The Power of Attorney and Representation Agreements are governed by provincial laws. The Power of Attorney is available in all provinces/territories, but they vary in details from province to province.

Representation Agreement is an alternative to the Power Of Attorney, but it is available only in the province of British Columbia.

In making decisions for them self, they may take many things into consideration. They may consult with family and friends and may choose to do what their family decides for them.  How they make decisions and what they take into account in order to make decisions is up to them.

Mental capacity in law is ISSUE or TASK specific. A person is "incapable" in respect of a particular type of decision - broadly in respect to property and more specifically in respect to the types of property decisions (such as making a will, managing money, investing, etc)). The idea is that people should NOT be labelled as globally incapable and their specific capacities to understand and appreciate should be respected so that the abilities of a person are recognized instead of labelling them by their inabilities.

A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision.

A power of attorney can be very specific.  For example, you may give your parents a power of attorney just for management of your RDSP Plan.  Your bank can also give you a form if you need a power of attorney for a specific bank account.

On the other hand, a power of attorney can be very general. If you wish, you can give your attorney very wide powers to deal with all of your assets, including the management of your RDSP account.

• A Continuing Power of Attorney for Property covers your financial affairs and allows the person you name to act for you even if you become mentally incapable.
• A Power of Attorney for Personal Care covers your personal decisions, such as housing and health care.  In some provinces your attorney cannot make medical or health care decisions for you, such as consenting to surgery or dental work for you.   In those provinces for these decisions, you need to make what’s called a “representation agreement.”
• A non-continuing Power of Attorney for Property covers your financial affairs but can’t be used if you become mentally incapable. You might give this Power of Attorney, for example, if you need someone to look after your financial transactions while you’re away from home for an extended period of time.

Making a Power of Attorney is voluntary. No one can be forced to make one.

The Representation Agreement Act allows you to appoint someone as your legal representative to handle your financial, legal, personal care and health care decisions, if you’re unable to make them on your own. The document is called a representation agreement, and it creates a contract between you and your representative.

There are two types of representation agreements.

• One is a limited agreement – to cover straightforward, everyday decisions (like managing your bank account).
• The other is  – to deal with complex legal, personal care and health care matters.

It is an alternative to the Power of Attorney for property but it is available only in the province of British Columbia.

• In Ontario only the Power of Attorney is available and there is no registry for it.
• In British Columbia both the Power of Attorney and Representation Agreement are available.  And at the Representation Agreement Resource Centre, you can register both enduring powers of attorney and representation agreements. Hospitals, banks and government services can search there to find out who your attorney or representative is if they need to.