The two main disability savings accounts and how they differ

If you receive disability benefits or have a disability diagnosis, you can open one of two tax-advantaged savings accounts: an ABLE account (in the United States) or an RDSP (Registered Disability Savings Plan, in Canada). Both let you save money without losing your benefits, but they work differently and have different rules about who can open them.

An ABLE account is a savings and investment account you control yourself. You can deposit up to $17,000 per year (as of 2023; this amount changes yearly), and the money grows tax-free. You can withdraw it whenever you need it without penalty. An RDSP is similar but requires a plan holder (usually a parent or guardian) and a beneficiary (the person with the disability). RDSPs also offer government grants and bonds that add money to your account automatically.

The main trade-off: ABLE accounts are simpler to open and manage alone, but RDSPs give you free government money if you meet the income requirements. Both protect your savings from counting against disability benefit limits in most cases.

Key Takeaways

  • ABLE accounts are for U.S. residents with a disability onset before age 26, and you can open one online through a financial institution in minutes.
  • RDSPs are for Canadian residents and require a plan holder (often a parent) to open the account on behalf of the beneficiary with the disability.
  • Both account types let you save money without losing Supplemental Security Income (SSI) or other disability benefits, though ABLE accounts have a $100,000 resource limit.
  • RDSPs offer government grants and bonds that match your contributions, adding assistance programs to the account if your family income is below the threshold.
  • You will need proof of disability diagnosis, a Social Security number (ABLE) or Social Insurance Number (RDSP), and a bank account or investment account to get your free guide.

Opening an ABLE account in the United States

To open an ABLE account, you must be a U.S. citizen or resident alien, have a disability that began before age 26, and have a Social Security number. You do not need to be receiving SSI or Social Security Disability Insurance (SSDI) — the disability diagnosis alone is enough. You can open the account yourself if you are an adult, or a parent or guardian can open it for a minor.

Start by choosing a provider. The most common are Fidelity, Schwab, and Vanguard, though other banks and investment firms offer ABLE accounts. Go to the provider's website and look for their ABLE account section. You will need to provide your name, address, Social Security number, and proof of disability. Proof can be a letter from your doctor, a copy of your disability information letter from Social Security, or documentation from the Department of Veterans Affairs if you are a veteran.

The application takes 10 to 15 minutes online. Once approved (usually within one to three business days), you can deposit money immediately. You can set up automatic transfers from your bank account, deposit by check, or transfer funds from another account. There is no monthly fee at most providers, though some charge a small annual maintenance fee or require a minimum balance.

Opening an RDSP in Canada

An RDSP requires two people: a plan holder (usually a parent, guardian, or the person with the disability if they are an adult) and a beneficiary (the person with the disability). The beneficiary must have a valid diagnosis of a severe and prolonged impairment, which is confirmed by a Disability Tax Credit (DTC) certificate from the Canada Revenue Agency (CRA).

To open an RDSP, the plan holder must contact a financial institution that offers RDSPs — most major Canadian banks do, including TD, RBC, BMO, and Scotiabank. Bring the beneficiary's Social Insurance Number (SIN), proof of the DTC certificate, and identification. The plan holder will sign the agreement on behalf of the beneficiary. The account opens within one to two business days.

Once the RDSP is open, you can apply for government grants and bonds. The Canada Disability Savings Grant (CDSG) matches contributions dollar-for-dollar up to $2,500 per year if your family income is below $49,020 (as of 2023). The Canada Disability Savings Bond (CDSB) adds up to $1,000 per year to low-income accounts even if you do not contribute. These grants and bonds are assistance programs and are the main reason to open an RDSP.

Resource limits and how savings affect your benefits

ABLE accounts have a resource limit: once your account reaches $100,000, you become ineligible for SSI (though you keep SSDI and other benefits). Money above $100,000 does not count toward the limit, so you can keep saving, but you will not receive SSI payments while the account is over that threshold. Once it drops back below $100,000, SSI resumes. This limit applies only to the ABLE account itself, not to other savings or assets.

RDSP savings do not count against any benefit limits in Canada. The account is separate from income and assets for the purposes of provincial disability supports or federal benefits like the Registered Disability Savings Plan itself.

In both cases, the money in the account is yours to use. Withdrawals do not count as income for benefit purposes in most situations, though you should check with your specific benefit program. If you receive SSI and withdraw from an ABLE account, the withdrawal itself does not reduce your benefit, but it does count toward the $100,000 resource limit.

What documents you need before you start

For an ABLE account, gather your Social Security number, a government-issued photo ID (driver's license or passport), and proof of your disability. Proof can be a letter from your doctor on letterhead stating your diagnosis and that it began before age 26, a copy of your Social Security disability information letter, a VA disability rating letter, or a Disability Tax Credit certificate if you have one. Most providers accept any of these; you do not need all of them.

For an RDSP, you need the beneficiary's Social Insurance Number, a government-issued photo ID for the plan holder, and the beneficiary's Disability Tax Credit certificate. The DTC certificate is issued by the CRA and is required to open the account. If you do not have one, you must apply for it through the CRA before opening the RDSP. The DTC application takes four to six weeks to process.

Funding your account and making deposits

Once your account is open, you can deposit money in several ways. Most providers let you link your bank account and set up automatic transfers — weekly, monthly, or whenever you choose. You can also deposit by check, wire transfer, or in person at a branch if you use a bank. Some providers let you deposit through their mobile app.

For ABLE accounts, you can deposit up to $17,000 per year (this is the annual contribution limit as of 2023, but it changes yearly). If you receive income from work, you can deposit more than $17,000 in a single year if you meet specific conditions, but this is rare and requires filing extra forms. For RDSPs, there is no annual contribution limit, but government grants max out at $2,500 per year.

You can also transfer money into an ABLE account from another savings account, a 529 plan (education savings), or a Coverdell ESA. Transfers from these accounts do not count against your annual deposit limit. For RDSPs, you can transfer money from other registered accounts like RRSPs, but this is less common and has tax implications.

What to do if your application is denied or delayed

ABLE account applications are rarely denied if you meet the basic requirements (U.S. residency, disability onset before age 26, Social Security number). If your application is denied, the provider will tell you why — usually because the disability proof did not clearly show the onset date or because there was an error in your Social Security number. Contact the provider and ask what additional documentation they need. You can resubmit with corrected information.

RDSP applications can be delayed if your Disability Tax Credit certificate is expired or missing. The DTC must be current (issued within the last five years) for the RDSP to open. If yours is expired, apply for a renewal through the CRA before opening the account. This takes four to six weeks. If you are waiting for your DTC decision, you can open the RDSP as soon as it is approved.

If you have questions about your application status, contact the financial institution directly — they can tell you whether documents are missing or if there is a processing delay. Most institutions have a phone line for ABLE or RDSP questions.

Choosing investments and managing your account

Once your account is funded, you decide how to invest the money. ABLE accounts typically offer a range of investment options: money market funds, target-date funds (which automatically adjust as you age), individual stocks, bonds, and mutual funds. If you are unsure what to choose, most providers offer a simple default option that invests conservatively. You can change your investments anytime without penalty.

RDSPs work the same way — you choose from the investment options your financial institution offers. Many people choose a balanced fund or target-date fund and leave it alone. You can also keep money in a savings account within the RDSP if you prefer not to invest it.

Both accounts let you check your balance online or through a mobile app. You can withdraw money anytime, though some investments may take a few days to sell before the cash reaches your bank account. There are no penalties for withdrawals in either account type.

Frequently Asked Questions

Can I open an ABLE account if I am already receiving SSI?

Yes. You do not need to be receiving SSI to open an ABLE account — you only need a disability diagnosis that began before age 26. If you are already receiving SSI, opening an ABLE account does not affect your current benefits. Your SSI continues until your ABLE account reaches $100,000.

What happens to my RDSP if I move to the United States?

Your RDSP remains open and continues to grow. However, you will no longer be may be able to access for Canadian government grants and bonds (CDSG and CDSB). You may want to open an ABLE account as well to take advantage of U.S. tax benefits. Talk to your financial institution about your options.

Can someone else manage my ABLE account if I cannot?

Yes. You can name an authorized representative or power of attorney to manage the account on your behalf. The process varies by provider, but most let you add someone through their website or by visiting a branch. You remain the account owner.

Do I have to use the money in my ABLE or RDSP for disability-related expenses?

No. The money is yours to use for any purpose — housing, food, education, transportation, or anything else. There are no restrictions on how you spend it. The accounts are simply tax-advantaged savings vehicles for people with disabilities.

What if I inherit money or receive a lump-sum payment — can I deposit it all at once?

For ABLE accounts, you can deposit up to $17,000 per year (the annual limit). If you receive a larger lump sum, you can deposit the annual limit in the current year and the rest in the following year. For RDSPs, there is no annual deposit limit, so you can deposit any amount at once. However, government grants are capped at $2,500 per year regardless of how much you deposit.