If you do not have an electric jigsaw and you do not want to invest in one, a perfect (and economical) tool for this job would be what is commonly referred to as a keyhole saw. You will be surprised by how often it comes in handy after you own one:
This seems like an application where a saw like the one pictured below would be ideal. If you get the more expensive hollow ground type of blade for it the cut can be nice and smooth.
Hollow Ground Jigsaw Blade
If you really want to cut that rebate, you could use a hand-held circular saw, you'll probably need one with an 8" or bigger blade to get the depth, to get a straight cut fix a staight-edge for the foot of the saw to follow.
finish with chisels or an oscillating blade tool.
Trimming the roller shade is obviously the right answer, but just in case somebody has a similar problem where it isn't the right answer:
Don't try and create a router cut 3½" deep and ¼" wide - create one 3½" wide and ¼" deep. No router will have a problem with that. Probably easiest to clamp a piece of scrap to the outside of the beam, and then just cut ...
What about trimming the roller shade? Most shades are meant to be trimmed, since manufacturers can't make every single size. See if you can pop off one of the ends, and then cut the rolled-up shade with a utility knife or something similar.
Shifts in humidity will cause the frame to expand and contract across its width; the wider the frame the more it will expand. i.e. The wood total movement will be a small percentage the piece's overall size. So a four inch frame with a two inch rabbet will be much more likely to separate at the corners than a 2.375 inch frame with a 3/8" rabbet, despite them ...
Don't use grinders on wood. They are too light to be controllable. I just got out of hospital after a 4-inch chain disc jumped out of a holly log straight into my right knee. It dug right down to the knee joint - but thankfully missed all arteries and tendons. I have gruesome photos but hopefully my account is gruesome enough
Just a warning, unless you are pretty handy this should be done by a pro. If you have done large glue ups before, and have 2 people to help at glue up time and everything protected from dripping glue, you may have a chance.
It starts with your wood selection, for a finished hand rail that will measure 1 1/4" to 1" thick by 2" wide you will need 8- 1/4" ...
You absolutely can make any mitre cut with a table saw provided you have the correct jigs and guides. But, it's a LOT simpler and quicker to use a mitre saw to make mitre cuts. For "casual" work or just one-offs, then go ahead and use your table saw. If you're wanting to have quick and repeatable angle cuts, then get a mitre saw.
If you have to choose ...
The search term you want is, "bending handrail". You'll form the curve to the outside of the treads with a ton of glue and clamps. Then, a few scant hours later, you'll have belt sanded the whole affair smooth and be ready to finish and install.
The hard part is that your rail should probably be centered on the balusters. Which means the balusters are in ...