What is GIC Canada for International Students - A Brief Guide
Table of Contents[Show]
- What is the meaning of GIC in Canada
- Why is GIC needed
- What is the minimum amount required for an international student to open a GIC account
- Benefits of opening a GIC account
- Guaranteed Investment Certificate Highlights
- Step-by-Step Application Process for a Guaranteed Investment Certificate
- Financial institutions that offer GIC
- Bank Registration criteria for obtaining GIC
- Navigate the complexities of studying abroad With GetGIS
One of the most common questions that many students ask before pursuing their studies in Canada is about GIC. The points that we are going to address below are important for international students because GIC is an essential part of the Canadian study permit process and can have a significant impact on the student's stay in Canada.
Let’s deep dive and understand the different aspects and how GIC works before applying for a study permit.
What is the meaning of GIC in Canada?
GIC Canada, also known as the Guaranteed Investment Certificate, is a savings plan specifically designed for international students who are planning to study in Canada. This investment program is required by the Canadian government as proof of financial support for international students during their stay in Canada. It serves as a guarantee that international students have the necessary funds to pay for their tuition fees and living expenses while studying in Canada
Why is GIC needed?
The Canadian government has made GIC compulsory because of these major reasons:
- To ensure that students coming to study in Canada can afford basic expenses for at least a year.
- It serves as proof of funds which is compulsory for getting a visa/permit, this further expedites the process.
What is the minimum amount required for an international student to open a GIC account?
International students under the Student Direct Stream system need to deposit $10,000 CAD to $15,000 CAD in their first year, with one of the banks that is recognized under the Canadian embassy. You may have to pay a nominal amount of transaction fees depending on the conditions of the bank with which you have opened your GIC account.
For example, let's see how it works with CIBC bank:
- Open a GIC account with $10,000CAD
- When you visit the CIBC bank $2000 CAD will be added to your savings account
- While the remaining $8000 CAD is invested in your GIC program account.
- Over the year You will get the full amount of investment along with the interest depending on the terms and conditions of the bank in 11 equal payments
Note: It is always best to consult with the university or college you plan to attend regarding the initial deposit as the amount can vary under specific financial requirements or recommendations.
Benefits of opening a GIC account
Now that you know what is GIC Canada for international students and why it is needed, let’s see some of the major advantages of having a GIC account. Although owning a GIC account has many advantages, we will focus on the three most important ones.
One of the major advantages of GICs for international students is that they are a low-risk investment option. The rate of return is guaranteed and investors do not have to worry about losing their principal investment. This makes GICs an ideal choice for students who may not have a lot of experience with investing, or who are looking for a secure way to save money while studying in Canada.
2. Fulfills the financial requirement for a visa
The Canadian government requires international students to prove that they have enough money to cover their tuition fees and living expenses while studying in Canada. A GIC can be used to demonstrate this, as long as the investment is held for at least one year, and is held in the student's name or their parent's name.
3. High Liquidity
Another advantage of GICs for international students is that they are a liquid form of investment. This means that, unlike other types of investments like stocks or real estate, the money can be easily accessed if the student needs it. Some GICs can be cashed out before maturity with a penalty, while others require waiting till maturity. So it becomes easy for international students studying in Canada to access money.
Guaranteed Investment Certificate Highlights
|Full-Form||Guaranteed Investment Certificate|
|Participating in Canadian Financial Institutions||Scotia Bank, ICICI Bank|
|Types of GICs||
Fixed rate GICs
Variable rate GICs
|Who needs GIC||Students applying under Student Direct Stream|
|Term duration for a GIC||6 months-1 year|
|Amount Required for opening GIC account||CAD 10,000 + Banking charges (if any)|
Step-by-Step Application Process for a Guaranteed Investment Certificate (GIC)
Step 1: Register for bank-secured email service
In order to apply for a GIC, you would need to register with an authorized Canadian bank to get secured email services. This service allows the individual to securely transmit documents and personal information to the bank.
Step 2: Submit the Student GIC Program Application
Once you have registered for the bank's secure email service, you will receive an email for Student GIC Program Application. You would need to fill in all the necessary information in the form including your contact details, education and employment history, and financial situation. You can fill out this form either online or offline. To fill out the form offline, you need to download the form from the registered email address and take a printout of the form.
Note: The application process can take up to 5 business days.
Step 3: Fund your account
After submitting the Student GIC Program Application, you will get an “investment account number” with funding details in your secured email. You would need to fund your account with at least $10,000 CAD plus the transaction fees (if any). This can be done by transferring money from your personal savings account or joint savings account.
Step 4: Apply for the Study Permit/Visa
Once you have funded your account, you can apply for a Study Permit/Visa. You can apply for it from the Canadian office in your respective country. You would also need to submit an investment account number for a student permit/visa.
Step 5: Complete the documentation formalities
After arriving in Canada, visit any of the branches of the bank with which you have opened your GIC account and complete all the documentation formalities. For this, you would need to bring: a valid Passport, Study Permit, investment Balance Confirmation, and a letter of admission from the Canadian university.
Once these steps have been completed, then you will be enrolled in the GIC program and you can start investing your funds in the GIC.
Note: In case your study permit/visa is declined, you would get a refund of $10,000 CAD in your source account. To get the refund, you would need to give proof of cancellation of your study permit and withdrawal of enrollment from the Canadian
education institution or declined admission application from a Canadian educational institution.
Financial institutions that offer GIC
Just understanding what is GIC Canada for international students is not enough, you will need to know which financial institutes are authorized to provide GIC. You can get a GIC account from any of the banks that are authorized by the Canadian government. Also, make sure that the financial institution you choose offers GIC and fulfills all the criteria for the Student Direct Stream.
Below are the three most popular banks you can open a GIC account as an international student.
|Banks||CIBC, Canada||Scotiabank, Canada||ICICI Canada|
|Mode of Registration||Online||Online||Online|
|GIC Amount + Processing fee||$10000 CAD||$10200 CAD||$10150 CAD|
|Name of the Confirmation Document||Poof of investment||Investment Directions confirmation||Investment Balance Confirmation|
|Mode of transfer||Wire Transfer||Wire Transfer||Wire Transfer|
|GIC Refund Processing Fee||Disclosed at the time of refund||Disclosed at the time of refund||$10 CAD|
|GIC Redemption Period||11 months||12 months (can be extended)||12 months|
|Interest on GIC Amount||0.5% (p.a)||Depends on selected program||1% (p.a)|
Bank Registration criteria for obtaining GIC
Banks that give GIC should meet certain criteria. If the bank fails to do so, then you will not be allowed to apply for a student visa/permit through the Student Direct Stream. So, make sure that your bank fulfills the criteria mentioned below.
1The bank must confirm that you bought a GIC by giving you 1 of the following:
- A letter of attestation
- A GIC certificate
- An Investment Directions Confirmation or
- An Investment Balance Confirmation
2The bank must keep GIC in an investment account or a student account that you can’t access until you arrive in Canada or will release the funds only by providing:
- An initial lump sum upon arrival in Canada
- The remaining funds should be released in monthly or bi-monthly installments over a period of 10 to 12 months
Navigate the complexities of studying abroad With GetGIS
GIC is a safe and secure investment option for international students in Canada. With guaranteed returns and easy accessibility, it is a great way to save money while studying in Canada and also help in meeting the financial requirements of the student visa application. It is essential to always consider the terms and conditions of a GIC before investing and to compare rates of return offered by different banks.
At GetGIS, we understand the challenges and complexities of studying abroad as an international student. Our experts are well-equipped and provide end-to-end assistance with all your immigration needs.