🇨🇦 Canada · 5 min read · Published 2026-09-07 · Updated 2026-09-07

Written by Jordan Reeves · Editorial review: automated source and figure checks (how we check this)

Sources last verified: 2026-09-07

When Can I Withdraw From an RDSP?

At any time, but withdrawing within ten years of receiving a grant or bond triggers a repayment of that government money. The rule is what makes the timing of a first withdrawal one of the most consequential decisions in the plan.

60-SECOND ANSWER

A withdrawal within ten years of a grant or bond triggers repayment of government contributions, so timing determines what is kept.

The answer:: Grants and bonds received in the ten years before a withdrawal must be repaid, at a stated multiple of the amount withdrawn.
The trap:: Withdrawing early in an emergency. The repayment can exceed the amount taken out, so the plan is a poor emergency fund.
The recommendation:: Stop contributing at the point where the ten-year clock will have expired by the age withdrawals are needed.

Jump to the detail ↓

Where the AI summary above gets this wrong

"You can withdraw from an RDSP at any time without penalty."

That's surface-true. Here's what it misses:

The ten-year rule applies to government money — Grants and bonds paid in the previous ten years are repaid on withdrawal, at a multiple of the amount taken.
Withdrawals are partly taxable — Contributions come out tax-free, while grants, bonds and growth are included in the beneficiary's income.
Payments become mandatory at sixty — Lifetime disability assistance payments must begin by the end of the year the beneficiary turns sixty.

→ See what a withdrawal costs at your rate

01 The ten-year repayment rule

Any grant or bond paid into the plan in the ten years before a withdrawal must be repaid when a withdrawal is made. The repayment is calculated as a multiple of the amount withdrawn, capped at the total assistance received in that window.

The effect is that an early withdrawal can cost more in repaid government money than it delivers in cash. The grant and bond structure that creates this exposure is in RDSP grants and bonds.

Source: Registered Disability Savings Plan (RDSP)

02 How a withdrawal is taxed

A withdrawal is split into its components. The beneficiary's own contributions come out free of tax, having been made with after-tax money. Grants, bonds and all investment growth are included in the beneficiary's income in the year received.

Because most beneficiaries have low taxable income, the tax is often small, and the disability tax credit and other credits absorb much of it. The credit that gates plan eligibility is covered in the disability tax credit.

WORKED EXAMPLE · Try the numbers

Shows: what a given amount of additional taxable income costs you in tax at your marginal rate, and what you keep. Ignores: provincial surtaxes, credits that phase out with income, and any effect on income-tested benefits.

Amount ($)

Your marginal rate (%)

What you keep after tax

$6,700

At a 33% marginal rate, $10,000 costs $3,300 in tax and leaves $6,700.

Source: Registered Disability Savings Plan (RDSP)

03 When payments become compulsory

Lifetime disability assistance payments must begin no later than the end of the year the beneficiary turns sixty, and continue annually for life. The amount is set by a formula based on the plan value and life expectancy.

Planning backwards from that date is the usual approach: contributions should stop at least ten years before withdrawals are needed, so that the repayment window has closed by the time the money is drawn.

The plan can also be opened by the beneficiary themselves once they are an adult with capacity, which matters where a parent's involvement would otherwise be assumed. Where capacity is in question, the rules on who may act as holder have changed over time, and the current position is worth confirming rather than inferring from older material.

Source: Canadian income tax rates for individuals

The ten-year clock is the whole design of the plan and it is the part families understand last. Money is contributed generously through a beneficiary's twenties and thirties, and then a crisis at forty costs more in repaid grant than the withdrawal provides.