If you’re planning to pursue higher education from Canada, it’s important to understand the different financial provisions you can avail of. One common product is GIC. In this article, we’ll explore GIC full form, its eligibility criteria, documentation, types, benefits, and more, so you can make informed decisions.
Guaranteed Investment Certificate (GIC) is a financial product offered by Canadian financial institutions that acts as proof of funds for international students studying in Canada. As per the Canadian government’s regulations, international students are required to show evidence of sufficient funds to cover their living expenses while studying in Canada. This requirement aims to ensure students can support themselves financially throughout their stay and not become a burden on public resources.
The GIC amount in Canada for international students is set at CAD 20,635. This means that students need to deposit at least CAD 20,635 into a GIC account held with a designated financial institution in Canada. The purpose of this deposit is to demonstrate that the student has enough funds to cover their living expenses during the first year of their studies.
Is GIC compulsory for Canada? Yes, it is mandatory for international students planning to study in Canada. The Canadian government requires proof of funds through a GIC account in Canada as part of the study permit application process.
Eligibility for GIC in Canada
To be eligible for GIC as an international student in Canada, you need to meet the following criteria:
You must be a permanent resident of any of the following countries: India, China, Morocco, Pakistan, the Philippines, Brazil, Colombia, Senegal, Vietnam, Peru, Costa Rica, Antigua and Barbuda, Saint Vincent and the Grenadines, or Trinidad and Tobago.
You must have an acceptance letter from a Post-secondary Designated Learning Institution (DLI) in Canada.
You must be proficient in the English language for GIC account Canada. IELTS Score should be 6.0 or above.
Documents Required for GIC Account
To open a GIC account in Canada, you will need the following documents:
Copy of student’s passport
PAN card
University offer/acceptance letter
Proof of enrollment or admission
Types of GIC in India
There are three main types of Canadian GICs for Indian students. These include:
1. Non-cashable GIC
This GIC is ideal for students who can lock in their funds for a specific period. It provides the highest interest rates and both the principal amount and interest earned are not refundable until the maturity date.
2. Cashable GIC
A cashable GIC is similar to a non-cashable GIC but provides more flexibility for students. Unlike non-cashable GICs, cashable GICs allow you to withdraw your funds anytime. However, there’s a limit on the funds you can withdraw monthly.
3. Equity-linked GIC or market-growth GIC
This type of GIC offers returns based on market performance. These GICs typically guarantee a minimum return on the principal amount along with a potential bonus depending on the market performance.
How to open a GIC account in Canada?
Opening a GIC account in Canada involves four easy steps:
Step 1: Choose an appropriate and authorised financial institution:
Start wisely by selecting a financial institution that offers GIC accounts for international students. Ensure that the financial institution is authorised by the Canadian government and recognised by designated learning institutions (DLIs) in the country.
Step 2: Submit the GIC program application:
Once you have chosen a financial institution, you will need to submit an application for the GIC program online. During this step, you will be required to upload documents such as a copy of your passport and the admission letter from your DLI.
Step 3: Deposit CAD 20,635:
After submitting the application, you will need to deposit a minimum of CAD 20,635 into your GIC account. Additionally, there may be a processing fee ranging from CAD 150 to CAD 200.
Step 4: Receive confirmation and certificate:
Once your deposit is made, you will receive an Investment Balance Confirmation and a Certificate of Investment. These documents serve as proof of funds in your study permit application. In India, financial institutions like SBI Canada, ICICI Bank Canada, Scotiabank, and HSBC Bank of Canada provide GIC facilities.
Benefits of GIC for International Students in Canada
Now that we understand what is a GIC Canada for international students and how to open an account let’s explore some of the benefits it offers to international students:
1. Proof of Funds:
The primary benefit of GIC is that it fulfills the Canadian government’s requirement for proof of funds. By opening a GIC account and depositing CAD 20,635, you demonstrate your ability to cover living expenses during your first year in Canada.
2. Financial Security:
With a GIC account, you have access to a predetermined amount of money every month during your studies in Canada. This provides financial security and ensures you can meet your day-to-day expenses without worrying about running out of funds.
3. Easy Accessibility:
While the deposited amount is locked for one year, once you arrive in Canada and start studying, the funds become available in monthly installments. This makes it easier for international students to manage their expenses without depleting their savings at once.
4. Interest Earnings:
GIC accounts offer a fixed interest rate, allowing your deposited amount to grow over time. While the interest rates may vary depending on the financial institution and the type of GIC account, it provides an opportunity to earn additional income on your investment.
Earnings from GIC: Sample Calculation
Let’s take a look at a sample calculation to understand how the earnings from a GIC account can accumulate over time. Suppose you deposit CAD 20,635 into a GIC account with an annual interest rate of 2% for one year. Here’s how the calculation would look:
Principal Amount (P) = CAD 20,635
Annual Interest Rate (R) = 2%
Period (T) = 1 year
Interest Earned (I) = P R T / 100
= 20,635 2 1 / 100
= CAD 412.70
Total Amount after One Year = Principal Amount + Interest Earned
= CAD 20,635 + CAD 412.70
= CAD 21,047.70
As demonstrated by this calculation, your initial deposit of CAD 20,635 grows to CAD 21,047.70 after one year. This showcases the potential for your funds to increase through the interest earned on your GIC account.
How to Use GIC for Living Expenses in Canada
Let’s consider a realistic scenario where international student Aman is studying in Canada and has deposited CAD 20,635 into a GIC account.
Aman’s monthly living expenses in Canada amount to approximately CAD 1,500. With his GIC funds accessible in monthly installments, he can utilise the available amount to cover his expenses without worrying about running out of money.
Month
Monthly Expenses
Available GIC Funds
Remaining Balance
1
CAD 1,500
CAD 1719.58
CAD 219.58
2
CAD 1,500
CAD 1719.58
CAD 219.58
3
CAD 1,500
CAD 1719.58
CAD 219.58
By the end of the third month, Aman will have utilised approximately CAD 4,500 from his GIC funds to cover his living expenses in Canada.
Tips to Select the Right GIC for You
Here are some tips to select the right GIC:
1. Consider your goals and the GIC terms
The ideal GIC should suit your investment goals and present financial situation as an international student. Different GICs offer different terms and interest rates. Therefore, it’s important to go through the details of each type to understand which one best suits your requirements.
2. Opt for a DLI
A Designated Learning Institution (DLI) is a school pre-approved by the government to admit international students in Canada. You can consider applying specifically to these institutes if you are seeking education abroad. Some famous DLIs in Canada are the University of Toronto, University of British Columbia, and McGill University. Verifying the DLI numbers of your chosen university is important to avoid getting scammed. This will assist you in picking the right GIC.
Conclusion
GIC, or Guaranteed Investment Certificate, is a mandatory financial requirement. for international students studying in Canada. By depositing CAD 20,635 into a GIC account, you can fulfil the Canadian government’s requirement for proof of funds while studying there. As a student, you can benefit from the visa requirement, monthly payouts, and interest earnings. It is a secure way to manage your personal finances while studying in Canada.
If you are an international student planning to study in Canada and require financial assistance beyond GIC requirements, Tata Capital offers education loans that can help fulfill your dreams of higher education abroad. Download the Tata Capital app today to learn more and apply for a loan that suits your needs.
The interest rates offered on GICs in Canada vary depending on the financial institution and the type of GIC. However, it typically ranges between 3% and 5%.
How do GICs work?
When you invest in a GIC, the amount gets locked in for a specific period. During this time, you earn a fixed rate of interest. You can withdraw these funds after the GIC matures.
How to pay a GIC in Canada from India?
To pay a GIC from India, select a Canadian financial institution that offers GICs for study permits and transfer the required CAD amount. Fill out the forms and provide the required documents to complete the process.
From where can you buy GIC?
You can buy GICs from designated financial institutions approved by the Canadian government.
What happens to my GIC if I leave Canada?
If you leave Canada, depending on your situation, your GIC principal amount from your account will be repaid, but you may not get back the interest. The bank will deduct applicable fees and refund you the final amount.
Can I withdraw my student GIC before maturity?
Usually, you cannot withdraw the amount from your student GIC before maturity. In case you choose to leave your university, you can request the bank to close your account and provide you with your GIC amount before maturity.
Is GIC high risk?
GIC is considered to be a low-risk investment method, because it protects your principal amount and offers a fixed, guaranteed return on maturity.
06 May 2025
7 mins read
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