GIC Account in Canada for Indian Students

Globalization has enabled students from different countries to pursue their education in foreign countries. Canada has emerged as a popular destination among international students due to its quality education, affordable tuition fees, and post-study work opportunities.

However, the cost of education and living expenses in Canada can be significant for many international students, including Indian students. This is where GIC (Guaranteed Investment Certificate) comes into the picture. In this article, we will discuss what GIC is and its uses for Indian students in Canada. 

What is GIC?

GIC is a type of investment product offered by Canadian financial institutions, such as banks and credit unions. It is a low-risk investment that guarantees the principal amount and a fixed rate of return over a specified period, typically ranging from 6 months to 5 years. 

GIC is a popular investment option for Canadians who want to save money for short-term goals, such as buying a car, renovating a home, or going on a vacation. However, GIC has also become popular among international students in Canada, as it can be used to fulfill the financial requirements of a study permit.

The Canadian government requires international students to prove that they have enough funds to cover their tuition fees and living expenses in Canada before issuing a study permit. The minimum amount of funds required depends on the program and location of study.

For example, international students studying in Ontario are required to show proof of funds of CAD 10,000 for a 12-month period, whereas those studying in Quebec are required to show proof of funds of CAD 12,474 for a 12-month period. These funds can be shown in various forms, such as a bank statement, GIC, or a combination of both.

How does GIC work for international students?

GIC for international students is a specific type of GIC that meets the financial requirements of a study permit. To open a GIC account, Indians students can visit a Indian financial institution like Orient Exchange that offers GIC for international students.

The minimum amount required to open a GIC account varies among financial institutions, but it typically ranges from CAD 10,000 to CAD 20,000. The funds are held in the GIC account for the duration of the study program, typically 12 months or longer.

The interest rate offered on GIC for international students is typically lower than that offered on regular GIC, as the financial institution assumes a lower risk due to the guaranteed nature of the investment. The interest rate may also depend on the duration of the GIC, with longer-term GICs offering higher interest rates.

The funds in the GIC account are not accessible until the end of the term, except for a small portion that can be withdrawn every month to cover living expenses. The amount that can be withdrawn varies among financial institutions, but it is typically around CAD 2,000 per month. This means that international students need to plan their budget carefully to ensure that they have enough funds to cover their living expenses until the end of the GIC term.

Uses of GIC for Indian students in Canada

GIC can be a useful financial tool for Indian students in Canada, as it can help them fulfill the financial requirements of a study permit and provide them with a low-risk investment option. Here are some of the uses of GIC for Indian students in Canada:

Proof of funds for a study permit

As mentioned earlier, international students are required to show proof of funds to cover their tuition fees and living expenses in Canada before being issued a study permit. GIC can be used to fulfill this requirement, as it guarantees the principal amount and a fixed rate of return over a specified period.

Low-risk investment option

GIC is a low-risk investment option that guarantees the principal amount and a fixed rate of return over a specified period. This makes it an attractive investment option for Indian students who may not have a lot of experience with investing or may be hesitant to take on higher-risk investments. Additionally, GICs are backed by the Canadian Deposit Insurance Corporation (CDIC), which provides insurance on eligible deposits up to CAD 100,000 in case of a financial institution failure.

Guaranteed return on investment

GICs provide a guaranteed return on investment, which can be beneficial for Indian students who may be on a tight budget and need to ensure that they have a reliable source of income. The fixed interest rate ensures that the return on investment is predictable and can help students plan their finances accordingly.

Build credit history

GICs can also be used to build credit history in Canada. Indian students who are new to Canada may not have a credit history, which can make it difficult for them to obtain credit cards, loans, or other financial products. By opening a GIC account and maintaining a good payment record, Indian students can establish a credit history and improve their credit score over time.

Post-graduation financial support

After completing their studies, Indian students may be eligible to apply for a post-graduation work permit (PGWP). To be eligible for a PGWP, students must show that they have enough funds to support themselves during their job search. GIC can be used to fulfill this requirement, providing Indian students with a reliable source of income while they search for employment.

Options Available for Indian Students to transfer funds to GIC Account

Indian students who wish to transfer money to Canada from India can do so through various channels, including:

Wire transfer: Indian students can wire transfer funds from their Indian bank account to their Canadian GIC account. To do so, they will need to provide their Canadian bank details, including the bank name, branch address, account number, and SWIFT code. The SWIFT code is a unique code that identifies the bank and is necessary for international wire transfers. 

Forex services: Forex services such as Orient Exchange can also be used to transfer funds to a Canadian GIC account. Students will need to visit a forex service provider and provide their Canadian bank details and other required information. The service provider will then transfer the funds to the Canadian bank account.

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Online transfer: Some Indian banks offer online transfer services that allow customers to transfer money abroad. To use this service, students will need to provide their Canadian bank details and follow the online instructions.

Conclusion

GIC can be a useful financial tool for Indian students studying in Canada. It can help students fulfill the financial requirements of a study permit, provide a low-risk investment option, guarantee a return on investment, build credit history, and provide post-graduation financial support. However, it is important for Indian students to carefully plan their budget and ensure that they have enough funds to cover their living expenses until the end of the GIC term. Additionally, students should research and compare different financial institutions that offer GIC for international students to find the best option for their needs.