Lori Meadows
International students planning to study in Canada need to prove they have sufficient funds to support themselves during their studies. This is often referred to as proof of financial support or proof of funds. One way to do this is by opening a Guaranteed Investment Certificate (GIC) account with a Canadian bank. A GIC is a short-term investment plan where students deposit money to cover their living expenses for a year. The bank then provides monthly payments from the account to the student. The GIC amount for international students in Canada increased in 2024 to CA$20,635, up from the previous minimum of CA$10,000.
| Characteristics | Values |
|---|---|
| What is GIC? | A Guaranteed Investment Certificate (GIC) is a type of secured investment, similar to a Certificate of Deposit in the United States. |
| Who needs GIC? | International students who want to study in Canada. |
| Why do international students need GIC? | To prove to immigration officials that they have enough money to support themselves during their studies. |
| How much money is required in GIC? | CAD 20,635 (INR 12,53,034 approx) as of January 1, 2024. |
| How does GIC work? | Students open an account with a Canadian bank that sells GIC, wire the GIC amount, and purchase the certificate. This certificate is then used as proof of funds when applying for a study permit. |
| What are the types of GIC? | Non-Cashable GIC and Equity-linked GIC or Market growth GICs. |
| Can GIC be used for re-applying for a study permit? | Yes, as long as the GIC meets the prevailing study permit requirements and the program requirements are completed within 365 days of opening the account. |
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What You'll Learn
GIC as proof of funds for international students in Canada
International students applying to study in Canada are required to prove they have sufficient funds to support themselves during their studies. This requirement is often referred to as "proof of financial support" or "proof of funds". A Guaranteed Investment Certificate (GIC) is one of the most popular ways to demonstrate this.
GICs are short-term investment plans offered by Canadian banks to international students interested in studying in Canada under the Student Direct Stream (SDS) program, which is an expedited study permit application process. The GIC is a secure investment backed by the Government of Canada, where students deposit money for their living expenses for a year. The money deposited in the GIC account is treated as proof of funds.
The GIC amount required for international students in 2024 is CA$20,635, which is twice the previous amount of CA$10,000. This amount is updated annually and may increase, as it did between 2019 and 2024 due to rising living expenses, inflation, and defaulting student visas. The required GIC amount may also vary depending on the province, with Quebec having different requirements.
To obtain a GIC, students can follow these general steps:
- Submit an online application to open a student chequing account and a GIC with a participating Canadian financial institution.
- Transfer the required funds (at least CA$20,635) to the student chequing account within 90 days of opening the account.
- Upon arrival in Canada, visit a branch of the bank to confirm your identity, sign the necessary documentation, and set up GIC redemption payment terms.
- Each month during the GIC's term, a portion of the principal and accrued interest will be transferred to the student's designated personal deposit account.
- After 12 months, the total amount of the GIC, including interest, will have been deposited into the student's personal account.
It is important to note that GICs have different time limits and interest rates, and there may be special GIC opportunities for international students. Students should research and compare different GIC options before selecting one. Additionally, students should be aware of any associated fees, such as wire transfer fees, and understand the terms and conditions of the GIC program they choose.
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GIC account opening process
To open a GIC account as an international student in Canada, you must be enrolled at a post-secondary designated learning institution in Canada and be at least 18 years old. The GIC account serves as proof of financial support for your Canadian study permit application.
There are several banks in Canada that offer GIC accounts for international students, including Scotiabank, TD Canada Trust, SBI Canada Bank, and RBC Royal Bank. Here is an overview of the GIC account opening process for each of these banks:
Scotiabank
The Scotiabank Student GIC Program is for students coming to Canada on a study permit. The program can only be used before obtaining study permit approval. To open a Scotiabank GIC account, you must first complete the Scotiabank Student GIC Program application online. Once you have wired funds to Scotiabank to open a Scotia Investment Account, they will provide a document that you can submit as part of your study permit application. After you arrive in Canada, you can visit a Scotiabank branch with the required documents, such as your study permit, to open your GIC account or student bank account.
TD Canada Trust
TD Canada Trust offers an International Student GIC Program with no application fee. You can complete an online application to open a TD Student Chequing Account and a TD International Student GIC. After submitting the application and completing the ID verification process, you will receive information about your TD Student Chequing Account and wire payment instructions. You will need to transfer funds to your TD account, with a minimum of CAD $20,635 plus incoming wire payment fees. Once TD receives your wire payment, CAD $20,635 will be invested in a TD International Student GIC, and a Confirmation of Investment will be sent to you by email.
SBI Canada Bank
To open a GIC account with SBI Canada Bank, you will first need to set up an account with the bank. After successful verification and account activation, the bank will open two accounts in your name: a Chequing or Savings Account, and a Non-Redeemable Student GIC account. You will then need to transfer CAD 20,635 plus fees to purchase the GIC. SBI Canada Bank charges an administration fee of CAD 150, which is non-refundable.
RBC Royal Bank
The RBC International Student GIC Program requires you to open a sole RBC Investment Account and Guaranteed Investment Certificate (GIC) in your own name. You will need to make a single, one-time international wire transfer to pay the minimum GIC amount of CAD 20,635 plus any applicable fees. Once RBC receives your wire transfer, they will deduct the CAD 200 handling fee, and the remaining balance will be used to purchase your GIC.
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GIC redemption payment terms
International students in Canada can use a Guaranteed Investment Certificate (GIC) to meet the proof of financial support requirements for their study permit. GICs are a type of secured investment, similar to a Certificate of Deposit in the United States, and are commonly offered by Canadian banks and financial institutions.
The GIC redemption payment terms vary depending on the financial institution. Here are the GIC redemption payment terms for some of the popular financial institutions:
TD Canada Trust
TD Canada Trust offers the TD International Student GIC Program, which involves the following steps:
- Submit an online application to open a TD Student Chequing Account and a TD International Student GIC.
- Transfer funds to your TD account by sending a wire payment of at least CAD $20,635 plus incoming wire payment fees within 90 days of account opening.
- Once TD receives your wire payment, CAD $20,635 will be invested in a TD International Student GIC, and you will receive a Confirmation of Investment.
- After arriving in Canada, visit a TD branch to activate your account and access your money. TD will then redeem the sum of CAD $6,135 plus any accrued interest from your GIC and deposit it into your TD Student Chequing Account.
- The remaining funds will be redeemed according to the GIC Payment Schedule: CAD $1,450 plus any accrued interest will be deposited into your account over the subsequent 10 months.
Scotiabank StartRight®
Scotiabank StartRight® offers the Scotiabank Student GIC Program, which allows students to invest between $5,000 and $50,000 CAD. The program helps students get their study permits and access their funds upon arrival in Canada.
Scotiabank will only send refunds to a deposit bank account in the student's home country, and the entire balance must be wired back. Refunds may take up to four weeks from the date of receipt of the correctly completed Refund Application.
Royal Bank of Canada (RBC)
RBC, in partnership with ApplyBoard, offers GICs to international students. After receiving a letter of acceptance from an eligible Canadian college or university, international students can apply for a GIC with RBC through ApplyBoard. Once approved, students can complete and submit their application and set up their investment account. After creating the account, students can deposit funds into their GIC account.
In summary, the GIC redemption payment terms vary depending on the financial institution, but they generally involve transferring funds to a student chequing account and then redeeming the GIC funds in instalments, with the first instalment typically being a larger amount and the remaining funds being redeemed over several months.
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Types of GICs available
International students in Canada can choose from different types of GICs based on their financial needs and visa requirements. These options vary in terms of accessibility, returns, and lock-in periods.
Non-Cashable GIC
The Non-Cashable GIC is ideal for students who can keep their funds locked for a fixed period. This type offers the highest return rates, but the money remains inaccessible until the GIC matures. Non-Cashable GICs are perfect for those who want to maximize their returns and don't need access to the funds during the investment period.
Cashable GIC
The Cashable GIC is a flexible option with no lock-in period, allowing students to withdraw funds at any time. It is suitable for short-term investments, although withdrawals may be subject to a monthly limit. This type of GIC is ideal for students who want easy access to their funds and are looking for more liquidity in their investments.
TD International Student GIC Program
The TD International Student GIC Program is a popular choice for international students. It involves submitting an online application to open a TD Student Chequing Account and a TD International Student GIC. After successful verification, you will receive information about your accounts and wire payment instructions. You will need to transfer a minimum of CAD $20,635 to your TD account within 90 days of opening it. Once TD receives your wire payment, they will invest the required GIC amount of CAD $20,635 and send you a confirmation. The remaining funds will be accessible in your TD Student Chequing Account.
Scotiabank Student GIC Program
The Scotiabank Student GIC Program is another option for international students. It requires you to open a Scotia Investment Account and fund it with a wire transfer from your bank account in your home country. Scotiabank offers the Guaranteed Income Optimizer (GIO) and Cashable Guaranteed Investment Certificate (GIC), both of which are eligible for insurance by the Canada Deposit Insurance Corporation (CDIC). Upon arrival in Canada, you can visit a Scotiabank branch and open a student chequing account, allowing you to access your funds.
It is important to note that GIC interest rates are usually higher than those of savings accounts, and there is no risk of losing your initial investment. When choosing a GIC, it is recommended to compare interest rates and returns across different banks to maximize your earnings. Additionally, consider the bank's reputation, student-friendly services, and whether they fulfill the criteria for the Student Direct Stream.
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GIC interest rates and time limits
GIC, or Guaranteed Investment Certificate, is a mandatory financial requirement for international students in Canada. It is a type of secured investment, similar to a Certificate of Deposit in the United States. GICs are offered by Canadian banks and financial institutions and serve as proof of financial support for study permit applications.
GICs offer fixed interest rates for money that is invested over a specific length of time, typically ranging from six months to five years. The interest rates may vary depending on the financial institution and the type of GIC account. For example, Scotiabank offers a 1-year Cashable GIC that earns interest at the GIC rate applicable at the time of account opening. TD Canada Trust also offers competitive interest rates on its TD International Student GIC Program.
There are two main types of GICs: non-cashable and cashable. Non-cashable GICs cannot be encashed before their maturity date, and the funds are locked in for a specific term. Cashable GICs, on the other hand, offer more flexibility as they do not have a lock-in period, and funds can be withdrawn anytime with a monthly withdrawal limit. It is important to note that if the funds are withdrawn before the minimum holding period, interest may not be paid out.
When choosing a GIC, it is essential to consider your investment goals and financial situation. Different GICs offer different terms and interest rates, so reviewing the details of each type is crucial to understanding which one best suits your needs. Additionally, it is recommended to compare interest rates and time limits offered by different financial institutions before making a decision.
Overall, GICs provide international students in Canada with a secure way to demonstrate proof of financial support and earn competitive interest rates on their investments. By understanding the different types of GICs and their respective terms and rates, students can make informed decisions about their financial choices.
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Frequently asked questions
A Guaranteed Investment Certificate (GIC) is a type of secured investment that international students in Canada can use to show proof of financial support. The GIC amount required for international students in 2024 is CA$ 20,635.
GICs are most commonly offered by Canadian banks and financial institutions. Students can choose a GIC according to their preferences to get their study visa approved. GICs offer a fixed interest rate for money that’s invested over a specific length of time, usually between six months to five years. During the GIC's term, 1/12th of the remaining funds of the GIC principal (plus applicable interest) will be transferred to the student's designated personal deposit account.
First, an international student opens an account with a Canadian bank that sells GIC. This is done before coming to Canada. The student wires the GIC amount and purchases the certificate. A copy of the GIC purchase is used along with the study permit application. When the student secures admission and arrives in Canada, they are required to visit the bank where they bought the GIC. After a few formalities, the bank sets up GIC redemption payment terms.
