Are you an international student planning to study in Canada? If so, you should know that as part of your study permit application, you’ll have to prove to immigration officials you have enough money to support yourself during your studies. This requirement is often known as “proof of financial support” or “proof of funds.”
Even if you plan to work part-time while studying, your salary usually won’t be enough to cover both tuition and living costs. That’s why it’s important to have access to enough funds before you start your studies abroad. One of the best ways to strengthen your study permit application and prove you meet proof of funds requirements is with a GIC.
Below, we’ll explain what a GIC is and how it can boost your Canadian study abroad application.
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What is a GIC?
A Guaranteed Investment Certificate (or GIC) is a type of secured investment, similar to a Certificate of Deposit in the United States. GICs are most commonly offered by Canadian banks and financial institutions. If you’re an international student, this is a popular and secure way to show proof of financial support.
GICs offer you a fixed interest rate for money that’s invested over a specific length of time. The shortest time you’ll see is usually around six months, but most last one to three years. There are even some GICs that have a five-year term. You won’t be able to withdraw or use the money during that time. In exchange for leaving your money in a GIC, the bank will ensure that at the end of the term you choose, you’ll get the amount you deposited back (which is why it’s called a “Guaranteed Investment”).
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GIC Benefits
When buying a GIC, you’ll earn interest on the amount you deposited. The rate of interest you’ll get is often set, or fixed, when you deposit your money. That way, even if the market goes down, and interest rates drop everywhere else, you’ll still receive the interest you were promised.
Often, the longer you keep your money in a GIC, the better the interest rate will be. That means if you won’t need the money for a while, consider a longer-term GIC to maximize your gains!
GIC interest rates are usually better than what you’d get in a savings account. Also, there’s no risk of losing your initial investment the way you might if you invested in stocks or mutual funds. So in many ways, GICs are a good approach for students new to the Canadian banking system.
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What Do I Need to Know When Buying a GIC?
Check Out Different Options
Before you commit to one GIC, it’s smart to look around. See what different interest rates are offered and what the time limits or terms look like. Sometimes, there are special GIC opportunities for international students which offer different timeframes and conditions. You can also check with your college or university to see if they have any GIC recommendations.
Ask Questions
While the Government of Canada actually requires that banking communication is clear and simple, we get it—banking terms can be confusing. Never be afraid to ask questions to the financial representative you’re talking to. They’re there to help you.
Also, remember you’ve got rights as a banking customer, including a right to specific info when buying a GIC.
Also, remember you’ve got rights as a banking customer, including a right to specific info when buying a GIC.
The information you have a right to includes:
- The term of the GIC (one year, three years, etc.)
- How and when the interest is to be paid (yearly, or at the end of the term)
- If the annual interest rate is fixed, what it is
- If the interest rate is variable (changes), how it’s calculated, which rate they use to calculate your rate, the actual interest rate at your time of purchase, and how you can learn what the interest rate is during your investment
- Any charges that apply
- If and how you can cash in your GIC before the investment end date, if there are any penalties for doing so, and how that impacts the interest you get
If any info is missing, you have the right to ask for and get it from the financial institution.
Prepare your Application
While a GIC is not required for a study permit application, it is one of the strongest proof of funds you can provide. Please check the Government of Canada’s website for the most recent list of financial institutions with eligible GICs.
Once you purchase your GIC, you’ll need one of the following to show as proof:
- A letter of attestation
- A GIC certificate
- An Investment Directions Confirmation
- An Investment Balance Confirmation
Can ApplyBoard Help Me Get a GIC?
While we’re not a financial institution ourselves, we’ve partnered with two of Canada’s largest and most trusted banks: the Royal Bank of Canada (RBC) and TD Bank, to make it easier for international students like you to provide proof of financial support.
Here’s how you can set up a GIC quickly and easily:
- Once you have a letter of acceptance (LOA) from an eligible Canadian college or university, you can apply for a GIC with RBC or TD through ApplyBoard.
- Once you’re approved, complete and submit your application, then set up your investment account.
- After your account is created, deposit funds in your GIC account.
- When you submit your study permit application, include your GIC certificate in your study permit application to make it even stronger.
- Once you arrive in Canada, visit any RBC or TD branch to set up your GIC payments.
Ready to apply for an RBC or TD GIC with ApplyBoard? Start your application now!
We hope that this post has helped you understand what GICs are, how to get one, and how they can strengthen your study permit application.
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