Studying in Canada is a cherished dream for many students. As of December 1, 2023, Canada hosted a record 1 Million international students. This is a total of all students enrolled in all disciplines including graduate, postgraduate, doctoral, diploma, short-term, and vocational programs in the country. Canada’s high-quality education, excellent industry-academic connections, well-developed infrastructure, and a chance to work and settle in the country attract thousands of international students to study in Canadian institutes.
An integral part of studying in Canada is managing funds to study there. The most essential financial instrument for all international students in Canada is the Guaranteed Investment Certificate, better known as the GIC. This is a short-term investment plan offered by Canadian banks to international students interested in studying in Canada under the Student Direct Stream (SDS) program. For the unversed, the SDS program is an expedited study permit application process. It is the preferred way to seek a study permit in the country. This blog will elaborate on the GIC amount in Canada for international students in 2024.
What is GIC?
The GIC is a secure investment supported by the Government of Canada for international students. It is a deposit investment certificate sold by registered Canadian financial institutions to international students. International students need to keep CAD 20,635 (INR 12,53,034 approx) as a GIC amount to get a Canadian study visa, except for the province of Quebec. SDS applicants who intend to study abroad in Quebec must meet Quebec’s minimum financial requirements.
The objective of GIC is to assure the Canadian government that the student has sufficient funds for his annual expenses. GICs don’t cover the tuition fee. Typically a student must show proof of first-year tuition fee and CAD 20,635 GIC in Canada.
How GIC in Canada works for international students?
Given the volatile financial markets and frequent geo-political tensions, GICs secure a student’s education journey in Canada. It works as follows:
Step 1 – 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 later
Step 2 – When the student secures admission and arrives in Canada, he is required to visit the bank where he bought the GIC. After a few formalities, the bank sets up GIC redemption payment terms.
Step 3 – Every month 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.
Step 4 – After 12 months, the total amount of the GIC (plus applicable interest) will have been deposited into the student’s personal deposit account.
Recent changes in GIC for Canada
Earlier in 2019 and 2021, the Immigration, Refugees, and Citizenship Canada (IRCC) stated that 10% of rejected student visa applications were due to insufficient funds. Hence, GICs help in managing this rejection. Earlier, the required GIC amount for Canada was CAD 10,000 (INR 616,244 approx). The increase in living expenses, hike in the inflation rate, and defaulting student visas led to the recent rise in the GIC amount. Effective January 1, 2024, the GIC amount in Canada for international students is CAD 20,635.
Types of GIC for Canada
There are three types of Canadian Guaranteed Investment Certificates available. Students can choose a GIC according to their preferences, to get their study visa approved:
- Non-Cashable GIC – This type of GIC cannot be encashed before its maturity date. The funds are locked in for a specific term. Generally, this GIC category yields a higher return than a cashable GIC. Students who have sufficient funds prefer to go for this option.
- Cashable GICs – These require no lock-in period and the funds can be withdrawn anytime, though there is a monthly limit for withdrawal. If the funds are withdrawn before the minimum holding period then interest is not paid out. It is an ideal investment for the short term and the most preferred one too.
- Equity-linked GIC or Market growth GICs – These are linked with the equity market and follow stock or bond indexes. Market-linked GICs are a hybrid investment vehicle offering part GIC and part stock market investment. International students can get a minimum guaranteed return and a potential bonus return based on market performance.
Where to purchase GIC for Canada?
Indian students seeking Canadian higher education can buy a GIC for Canadian education online or offline. First, the interested students must have a bank account in the Canadian bank. They can proceed as follows:
- Online method: Visit the official website of authorized banks such as ICICI Bank Canada, SBI, and others. An option to purchase GIC is available in the user dashboard. This can be done virtually, and thus is user-friendly.
- Offline method: For this, students need to visit the branch of the authorized bank and fill out the required documents. This requires a physical visit to the bank and is time-consuming.
Irrespective of how the GIC to Canada is purchased, proof is required when filling out the study visa application. Thus, students are advised to keep a copy of the GIC purchase handy. One important factor to know is that students cannot do regular banking transactions until they arrive in Canada for education.
Best available 5-year GIC rates in Canada
As per Forbes Advisor, the following banks are offering the best 5-year GIC rates in Canada for May 2024 Intake:
– Saven Financial – 5%
– ICICI Bank – 4.75%
– EQ Bank – 4.60%
– Hubert Financial and Ideal Savings – 4.50%
– Oaken Financial – 4.50%
– Peoples Trust Bank of Canada – 4.45%
These are indicative and can change within and after the specified timeline.
Documents required from Indian students for Canada GIC
The Indian students are required to furnish the following documents for student GIC Canada:
- A copy of the passport
- A copy of the pan card
- University offer letter/acceptance letter
- Proof of enrollment or admission
Recent news related to GIC for Canada for international students
In March 2024, India’s HDFC Bank inked a deal with Canada’s TD Bank Group to help Indian students aiming to study in the North American country. As part of this understanding, HDFC Bank will help students with the Guaranteed Investment Certificate (GIC), which is a must for international students in Canada.
