What is Guaranteed Investment Certificate (GIC) for Canada?
Education Loan

What is Guaranteed Investment Certificate (GIC) for Canada?

What is Guaranteed Investment Certificate (GIC) for Canada?

On this Page:

Explore how GIC Canada assists Indian students with visa approval & financial stability for study. Learn about GICs, account setup & benefits.

GyanDhan
Rohit Gidwani
Updated on:  20 Mar 2024  | Reviewed By: 
Aman 
| 345 | 7  min read

Heading to Canada for studies can be exciting but also a bit tricky, especially when you need to show you have enough money. That's where a GIC comes in handy, making things easier for getting your student visa. This blog helps you get all the info on GICs, from what they are, picking a bank, to managing your account, aiming to smooth out this part of your journey to Canada.

Sprinkles

What is a Guaranteed Investment Certificate?

A Guaranteed Investment Certificate (GIC) in Canada is a financial product that offers a guaranteed rate of return over a fixed period. It is a secure investment that assures the return of the principal amount after the term ends, highlighting its safety and reliability for students heading to Canada for studies. Below is a comparison of GICs with Savings Accounts and Term Deposits:

  • list items Safety and return: Unlike regular savings accounts whose interest rates can fluctuate, GICs provide a fixed or variable interest rate over the term, ensuring a predetermined return.
  • list items Investment term: GIC terms can range from a few months to several years, providing flexibility and higher interest rates for longer commitments.
  • list items Financial security: GICs are generally insured up to $100,000 CAD by the Canada Deposit Insurance Corporation (CDIC), adding an extra layer of security.

Check Your Education Loan Eligibility

Sprinkles

Importance of GIC for Indian Students in Canada

For Indian students, a GIC Canada is not just a financial product but a visa facilitator under the Student Direct Stream (SDS) program. Here's why:

  • list items Proof of financial support: Demonstrates to the Canadian authorities the student's capability to sustain themselves financially in their first year, ensuring stability and focus on studies. There are certain proof of fund that you need to showcase to study in Canada.
  • list items SDS requirement: A mandatory component for SDS applicants, facilitating faster visa processing by evidencing financial reliability.
  • list items Financial readiness: Acts as a declaration of the student’s financial preparedness for living and studying in Canada, encompassing not just tuition but also living expenses.
  • list items Security and stability: Provides a guaranteed income stream for living costs, allowing students to concentrate on their education and adaptation to Canadian life.
  • list items Introduction to Canadian banking: Serves as an early interaction with the Canadian financial system, aiding in the establishment of financial history in Canada.
  • list items Access to services: This may assist in easier access to provincial healthcare and other community resources by demonstrating financial stability.
Sprinkles

How GIC Works?

Understanding the operation and the GIC meaning is key for students aiming to secure their financial foundation while studying in Canada. Here's a concise breakdown:

Types of GICs

  • list items Redeemable GICs: Offer the option to withdraw funds before the term completes, providing flexibility. Generally feature lower interest rates due to their flexible nature.
  • list items Offer the option to withdraw funds before the term completes, providing flexibility.
  • list items Generally feature lower interest rates due to their flexible nature.
  • list items Non-Redeemable GICs: Lock in funds for a predetermined term, prohibiting early access. Offer higher interest rates as compensation for the lack of access to funds during the term.
  • list items Lock in funds for a predetermined term, prohibiting early access.
  • list items Offer higher interest rates as compensation for the lack of access to funds during the term.

Interest Rates and Terms

  • list items Interest rate types: Fixed interest rates ensure the rate remains unchanged throughout the term. Variable interest rates fluctuate with the market, potentially offering higher returns.
  • list items Fixed interest rates ensure the rate remains unchanged throughout the term.
  • list items Variable interest rates fluctuate with the market, potentially offering higher returns.
  • list items Investment term length: Short-term options can range from 30 days to under a year, offering lower returns. Long-term investments, lasting up to 10 years, typically yield higher interest rates.
  • list items Short-term options can range from 30 days to under a year, offering lower returns.
  • list items Long-term investments, lasting up to 10 years, typically yield higher interest rates.

Purchasing Process

  • list items Where to buy: Available at banks, credit unions, and trust companies, each offering unique GIC certificate products.
  • list items Process and interest payment options: Purchases can be made online, in-person, or over the phone, with interest paid out at regular intervals or compounded and paid at maturity.

Looking for an abroad Education Loan?
By entering my phone number, I give consent to override NCPR and recieve WhatsApp messages.

Sprinkles

GIC Requirements for Indian Students

Under the SDS program, the current minimum GIC amount required is:

  • list items For most of Canada, the minimum GIC amount required is 20,635 CAD. This amount is carefully calculated to cover a wide range of living expenses, including accommodation, food, transportation, and miscellaneous costs, ensuring students can comfortably settle and focus on their studies without financial strain.
  • list items For students planning to study in Quebec, the required what is GIC in Canada amount is slightly lower, at 15,078 CAD. This difference accounts for the varying cost of living across different provinces and is aimed at matching Quebec's specific living expense estimates.

The GIC amounts required under the SDS program demonstrate Canada's commitment to providing international students with a stable financial start for their studies. Meeting these GIC requirements not only smoothens the visa process but also reassures students about their living expenses for the first year.

Sprinkles

Choosing a Bank for GIC in Canada

Selecting the right financial institution is crucial for opening a GIC account. Prominent banks offering GICs to international students include:

Each of these banks offers specific GIC products tailored for international students, ensuring competitive interest rates and easy online application processes.

Sprinkles

Opening a GIC Account: A Step-by-Step Guide

Opening a GIC account Canada is a structured process that helps ensure international students have the necessary funds to support their first year in Canada. Here's a step-by-step guide condensed into essential points:

  • list items Select a bank: Conduct research to find a bank that offers the best combination of GIC terms, competitive interest rates, customer service reputation, and convenience. Consider both the financial aspects and the support services offered to international students.
  • list items Application process: Prepare and submit your application, either online for convenience or in-person for a more personalized approach. This step requires documentation like your passport and admission letter from a Canadian institution. Ensure accuracy in your application to avoid delays.
  • list items Funding your GIC: After your application is approved, transfer the required funds to your new GIC account following the bank's specific instructions for international transfers. This involves sending 20,635 CAD for most of Canada or 15,078 CAD for Quebec, from your home bank account to the Canadian GIC account.

Also Read: GIC Refund Policy And Time

Sprinkles

GIC Withdrawal and Management

Managing your GIC account efficiently is key to ensuring financial stability in Canada. Here are some tips:

  • list items Withdrawal rules: Understand the conditions under which you can withdraw funds from your GIC, especially if you have a non-redeemable GIC.
  • list items Accessing funds: Banks typically disburse living expenses from the GIC to the student's account in monthly or quarterly installments.

Table: Comparison of GIC Features by Bank

Bank Name GIC Amount Interest Rate Type Application Process Withdrawal Terms

Scotiabank

CAD 20,635

Fixed

Online

Monthly/Quarterly payouts

SBI Canada

CAD 20,635

Fixed

Online

At maturity

ICICI Bank Canada

CAD 20,635

Variable

Online/In-Person

Monthly/Quarterly payouts

Note: The above table provides a general comparison and is subject to change based on current bank policies and offers.

Navigating through the requirements of the SDS program and ensuring you have the necessary funds in place can seem daunting. However, understanding the Guaranteed Investment Certificate (GIC) and how it facilitates your journey to studying in Canada is crucial. From selecting the right bank that meets your needs to understanding the process of funding your GIC, we hope this blog has illuminated the path for you.

If you're finding the GIC amount and its process overwhelming or if you're curious about pre-visa disbursement options that can aid in meeting your GIC requirements, we've got a solution. Check your eligibility with GyanDhan. We've partnered with lenders that offer pre-visa disbursement, potentially smoothing the way for your GIC and, by extension, your journey to Canada. Don't let the financial aspect of your study abroad plans hold you back. Explore your options with GyanDhan and take one step closer to realizing your academic dreams in Canada.

Sprinkles

Frequently Asked Questions

Can the GIC amount be changed after opening the account?

Generally, once a GIC account is opened and funded, the amount cannot be altered. However, students may open a new GIC with additional funds if needed, subject to the bank's policies.

Are there any annual fees associated with maintaining a GIC account?

Most GIC accounts for students do not have annual maintenance fees, but it's important to review the specific terms provided by the bank.

What happens to my GIC if I decide to return to my home country before it matures?

If you return home before your GIC matures, you may be able to close the account early, but this could involve penalties or loss of interest. Check your bank's policy on early withdrawal for international students.

Can I use the GIC funds to pay for tuition?

The primary purpose of a GIC is to prove you have funds for living expenses. Disbursements are typically scheduled and may not align with tuition payment deadlines. It's best to plan to pay tuition from other funds.

Is it possible to renew my GIC upon maturity if I am still studying in Canada?

Yes, most banks allow you to renew your GIC upon maturity. You may choose to renew it for another term or cash it out, depending on your financial needs at the time of maturity.

Check Your Education Loan Eligibility


Sprinkles

Have More Questions on This Topic?

Ask from a community of 10K+ peers, alumni and experts