In my last On Money newsletter, I wrote about the financial pain of transferring investment accounts from one financial institution to another in Canada. I received a lot of great feedback – thank you! – but one e-mail, in particular, stood out. The subject line was: “Think financial institutions are making it hard to transfer TFSAs and RRSPs? Take a look at RDSPs.”

RDSP stands for registered disability savings plan, which is by far the least well-known of the federal tax-advantaged accounts. It is, essentially, an RRSP for people with disabilities. It helps them and their families save for long-term needs in old age, when caregivers may not be around to provide practical or financial support.

As in an RRSP, money in the account grows tax-free until it is withdrawn. But what sets the RDSP apart is the government contributions: Up to $70,000 in grants and $20,000 in bonds (and for the latter, you don’t need to have made contributions). Needless to say, this can be a life-changing tool to help families of even modest means provide for their loved ones with disabilities.

And yet, RDSPs also come with a long list of common irritants. Some are related to how the account is designed. To open an RDSP, you need to qualify for the disability tax credit, which can be a difficult process, particularly for people with invisible disabilities and tricky diagnoses.

Among other nuisances, the lifetime limit on contributions to an RDSP is not indexed to inflation and has been capped at $200,000 since 2008. And there are rigid timelines and limits for withdrawals and several caveats on catching up on grants and bonds.

Then there are issues related to how financial institutions service RDSPs – and that’s what the newsletter reader who got in touch with me was alluding to. I called him up and our conversation was eye-opening.

Not only can it take months to transfer RDSPs between financial institutions, it routinely takes more than a month to process regular, annual withdrawals, he said. And that’s at the big bank that has held his RDSP for the last several years.

Staff at the local branch typically know little, if anything, about RDSPs and aren’t clear on how to direct queries about the account, he said. Simple questions and requests regularly lead to a wild goose chase trying to track down someone from the back-end office who handles RDSPs, he added.

Why doesn’t he switch banks? There aren’t many options. Setting up the ability to offer RDSPs is a labour-intensive process that many financial institutions aren’t interested in taking on for an account aimed at a relatively small section of the population. Mostly, it’s the big banks that offer RDSPs.

There are even fewer investing choices, particularly for those looking for low-fee self-directed options.

Still, for most people who qualify to have one, the RDSP is absolutely worth its many hassles. If you know someone who might benefit from it, spread the word.

As a final note, a special thank you to the many financial advisers who responded to my social media callout on this topic and shared their insights on RDSPs, helping me with this brief overview. If you want to reach me, I’m at ealini@globeandmail.com.

A groovy online calculator from the Wall Street Journal helping people estimate the cost of renovating their home to be able to age in place. (Paywalled)