Everything about GIC Account in Canada for Indian Students

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If you are a student wanting to invest before your stay in Canada, GICs or Guaranteed Investment Certificates can be a wise alternative for you! Now, you might wonder, what is a GIC and why should Indian students in Canada have a GIC account. We, Thomas Cook, are here to efface your perplexity.

What is a GIC in Canada?

A Guaranteed Investment Certificate or GIC is a Canadian short-term liquid investment scheme provided by the Canadian Government. It guarantees international students a fixed rate of return within a stipulated period of time. It stands out as a secure way of investing and getting returns to pay for your studies and accommodation expenses in Canada.

A GIC is basically an investment account. They are a common investment choice among international students since they generally offer guaranteed returns. Even while those returns are normally insufficient to make GICs someone’s principal investment vehicle, they might appear more alluring when interest rates and economic uncertainty, both, are rising.

Understanding how GICs function is essential if you intend to invest in one so that you can determine how they could fit into your overall financial strategy. Let’s have a look at how it works!

How does GIC work?

The idea is very simple; students have to deposit a sum of money, from their original account in the Canadian currency rate, to the GIC account on which they receive interest. It is one of the safest investments with little or no risk. Moneyback is guaranteed. The amount of money that students must deposit into this account is set and students receive interest on this amount every month. This is in accordance with the Canadian government’s regulations for students who travel there to pursue their studies under the Study Direct Stream (SDS) Program. It is an essential document or a symbol of availability of funds by the applicant to study in Canada.

Under the Student Direct Stream (SDS), GIC operates as a savings account. Traditionally, it supplies all suitable candidates with steady returns over speculated time. The deposit of one year’s worth of living costs into a Canadian bank is a prerequisite for people who intend to enrol in a course through SDS. A GICs interest rate does not change unless you choose one with variable interest. Usually, GICs cannot be redeemed or cashed out.

Prior to applying for the GIC, you must choose your reliable bank account first and then sign up for a Secure Mail account. You may do this by submitting a copy of your passport and your Canadian enrolment documentation. You will be given an account number for your Canadian GIC account after that has been done. Then, for a single application, you will need to wire the equivalent of $10,000 CAD to the Canadian account in a single transaction or as necessary for you. However, keep an eye out for transfer fees and exchange currency rate  charges that might drive up the cost of your sizable transaction.

Why is a GIC Account Mandatory?

A GIC account in Canada is mandatory for any Indian student aspiring to study in Canada. It serves as a guarantee to the Canadian government that Indian students in Canada have enough money to cover their living expenses for a year in Canada. It guarantees speedier processing of a study permit or a Canadian visa. Candidates must provide pertinent verification of their bank statements. These candidates/students are expected to deposit a predetermined amount of money, which usually is, CAD 10,000 + CAD 200 which equals to CAD 10,200, with one of the registered and authorised Canadian embassies.

The remaining fund is transferred to a non-redeemable GIC account. This account enables the students to invest a particular amount for a specific period through which they can acquire benefits from a fixed rate of interest.

 4 Easy Steps to Open a GIC Account in Canada:

• First Step:Wisely choose an appropriate and authorised bank to open a GIC account in Canada. Register for the Email account.
• Second Step:Submit the GIC programme application online. You’ll be required to upload your passport copy and the documents of the admission letter.
• Third Step:  Deposit a minimum of CAD 10,000 in your account along with a processing fee of CAD 150 to CAD 200.
• Fourth Step: Receive your Investment Balance Confirmation and Certificate of Investment.

Every international student in Canada must deposit their expenses for up to one year in a Canadian Bank to qualify for a student visa. Indian students in Canada need not submit any other additional financial documents to Immigration, Refugees and Citizenship Canada (IRCC) – the department of the Government of Canada, as proof of their currency that covers their living expenses.

Crucial Details – GIC

• International students applying under the SPP Visa category in Canada must invest CAD 10,000 in the form of a GIC with a Canadian bank.

• Both Canadian Dollars (CAD) and U.S Dollars (USD)  are accepted for GICs.

• Every month for the first 12 months, you’ll receive a portion of the deposited amount.

• GICs are available in the form of cashable/redeemable or non-redeemable GICs. If you have a cashable or redeemable GIC, you can receive your money back without incurring any fees. However, with a non-redeemable GIC, you cannot get your money back without incurring a fee.

• The Total deposited amount and interest on the investment will be credited to you at the end of the term.

• Opening a GIC is beneficial as a GIC certificate acts as a support system. It guarantees the Canadian Government that you have sufficient funds to manage your accommodation for at least a year in Canada.

•  It’s also a crucial requirement for getting a student visa under the direct student stream and expedites the application and its processing.

Not to worry! Your money will be secured under the Canada Deposit Insurance Company (CDIC).

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