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BMO Financial Group

December 21, 2010 06:58 ET

BMO Survey: Canadians With Disabilities Not Taking Advantage of RDSPs

- Only five per cent of Canadians with disabilities hold RDSP accounts

- A mere one in 10 of those impacted claim to be knowledgeable about the program

- Almost half have never heard of RDSPs

TORONTO, ONTARIO--(Marketwire - Dec. 21, 2010) - BMO Financial Group today announced the results of a survey revealing that only one in ten (10 per cent) Canadians with a disability, or those with a family member with a disability, are knowledgeable about the Registered Disability Savings Plan (RDSP) and its benefits, with 44 per cent having never heard of it. BMO, on the second anniversary of becoming the first bank to offer the RDSP account, reiterated its commitment as the market leader to continue to educate and raise awareness of this product.

RDSPs are designed to provide financial security for individuals with disabilities and combine the advantages of tax deferred investment growth with the opportunity to receive government subsidies. Despite the benefits that RDSPs provide, only five per cent of those surveyed actually hold an RDSP. While the majority of survey respondents shared a lack of awareness of RDSPs, once given a brief description, more than half (55 per cent) were interested in opening up an RDSP account.

"The financial costs associated with having, or caring for someone, with a disability can often be overwhelming and challenging, making it critical that work be done to raise awareness of this program which is designed to provide critical financial support," said David Sharone, Product Manager, Registered Plans and Solutions, BMO Financial Group. "When you consider the significant savings a beneficiary can accumulate through the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB), along with tax-deferred investment growth, RDSPs are a powerful investment tool that can offer long-term financial security."

Other Key Findings:

  • Of those who have heard of RDSPs, only six per cent know that contributions are tax sheltered
  • 44 per cent of respondents feel that RDSPs are "too good to be true" and there is probably a catch involved, despite the benefits they provide
  • 75 per cent of respondents indicated that they would like to know more about the RDSP program

"As the first bank to introduce RDSPs, we feel a special responsibility to educate Canadians about the advantages they provide," said Mr. Sharone. "The survey results clearly demonstrate that Canadians with disabilities are not aware of the assistance and financial relief available through RDSPs. We want to let them know that this program can be extremely helpful in providing critical financial support for those with disabilities."

"All Canadians should be very proud of this fantastic initiative – introduced by Finance Minister Jim Flaherty in the 2007 Federal Budget – where Canada is leading the world," concluded Mr. Sharone.

Additional Facts on RDSPs:

  • Who is eligible? Canadian residents under the age of 60 and eligible for the Disability Tax Credit. An account can be set up by the beneficiary themselves, parents of the beneficiary or any individual or organization legally authorized to act on behalf of the beneficiary.
  • What are the contribution limits? Up to $200,000 can be contributed over the life of an RDSP. Anyone can contribute to an RDSP, provided they have written consent of the account holder.
  • Are there contribution deadlines? The contribution deadline for 2010 is December 31st.

For more information on RDSPs, visit www.bmo.com or speak with a financial professional.

The survey was completed with 501 Canadian adults who have a disability or have a family member with a disability, and was conducted using Leger Marketing's Web panel between September 10 and 19, 2010.

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