If you plan to study in Canada as an international student, you may have heard the term “GIC” or Guaranteed Investment Certificate. But what exactly is GIC Canada for international students? In this guide, we will delve into the details of GIC and explore its significance for international students studying in Canada.
Understanding GIC Canada for international students
GIC, or Guaranteed Investment Certificate, 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 that students can support themselves financially throughout their stay and not become a burden on public resources.
People often ask, ‘How much is GIC for Canada’ or what is the GIC amount in Canada for international students?
The GIC amount in Canada for international students is set at CAD 10,000. This means that students need to deposit at least CAD 10,000 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 as part of the study permit application process. It shows your commitment and ability to cover your expenses while studying in the country.
Types of GICs for Indian students
There are three main types of Canadian GICs for Indian students. These include:
– 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.
– 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.
– 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:
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.
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.
3. Deposit CAD 10,000:
After submitting the application, you will need to deposit a minimum of CAD 10,000 into your GIC account. Additionally, there may be a processing fee ranging from CAD 150 to CAD 200.
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.
Benefits of GIC Canada for international students
Now that we understand what is GIC Canada for international students and how to open an account let’s explore some of the benefits it offers to international students:
Proof of Funds:
The primary benefit of GIC is that it fulfils the Canadian government’s requirement for proof of funds. By opening a GIC account and depositing CAD 10,000, you demonstrate your ability to cover living expenses during your first year in Canada.
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.
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 instalments. This makes it easier for international students to manage their expenses without depleting their savings at once.
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.
Sample calculation: Understanding the earnings from GIC
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 10,000 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 10,000
Annual Interest Rate (R) = 2%
Period (T) = 1 year
Interest Earned (I) = P R T / 100
= 10,000 2 1 / 100
= CAD 200
Total Amount after One Year = Principal Amount + Interest Earned
= CAD 10,000 + CAD 200
= CAD 10,200
As demonstrated by this calculation, your initial deposit of CAD 10,000 grows to CAD 10,200 after one year. This showcases the potential for your funds to increase through the interest earned on your GIC account.
Realistic scenario: Utilising GIC funds for living expenses
Let’s consider a realistic scenario where international student Aman is studying in Canada and has deposited CAD 10,000 into a GIC account.
Aman’s monthly living expenses in Canada amount to approximately CAD 1,500. With his GIC funds accessible in monthly instalments, 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 833.33
CAD 166.67
2
CAD 1,500
CAD 833.33
CAD 166.67
3
CAD 1,500
CAD 833.33
CAD 166.67
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.
Conclusion
In conclusion, GIC Canada is a mandatory financial product for international students studying in Canada. By depositing CAD 10,000 into a GIC account, students can fulfil the Canadian government’s requirement for proof of funds while studying there.
So, are you an international student planning to study in Canada and require financial assistance beyond GIC requirements? Tata Capital offers education loans that can help fulfil your dreams of higher education abroad. Download the Tata Capital app today to learn more and apply for a loan that suits your needs.
Take control of your finances and make informed decisions about managing your expenses while studying abroad with the help of GIC Canada and reliable financial solutions from Tata Capital.
How to apply loan for an education loan?
Follow these steps to apply for an education loan online:
Step 1: Visit the official website of your preferred lender and navigate to the ‘Education Loan’ section.
Step 2: Check your eligibility and click on the ‘Apply Now’ button.
Step 3: Enter your personal and educational details in the online application form.
Step 4: Upload the required documents and click on ‘Submit.’
The lender will review your application and verify the documents uploaded. Once they are satisfied, they will approve and sanction your loan and disburse the amount directly to your bank account.
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%.
2. 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.
3. 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.
4. From where can you buy GIC?
You can buy GICs from designated financial institutions approved by the Canadian government.
30 August 2024
7 mins read
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