GIC stands for "Guaranteed Investment Certificate," a short-term liquid investment usually for a year offered by Canadian Banks. As per the requirements of the Student Partner Program (SPP) Visa under Citizen Immigration Canada (CIC), students who are applying for studies in Canadian Colleges under the SPP Visa Category must invest CAD 20635 in GIC with Canadian Banks.
Overseas Education and pertaining to a job there itself has become a trend among us. Canada is such a country to opt for higher studies. The emigration process being easy also makes Canada an attractive place for Indian students. Attractive job opportunities are also another vital thing for concern.
A Guaranteed Investment Certificate (GIC) is a lifesaver for students intending to travel to Canada. It helps to apply for a study permit by meeting the immigration, refugee and other student needs while studying in Canada. It is a low-risk investment guaranteed to protect you with the exchange rates. A GIC account means saving towards a particular goal, like a down payment.
GIC stands as a promise to the Government of Canada that there is enough money in your account for your well-being away from your hometown. It also helps in the quick processing of your VISA.
It acts as a basic checking account for the students. So parents can quickly transfer funds. Both cash withdrawals and deposits can also be made with GIC. It also acts as a VISA card with a monthly withdrawal of CAD 750.
The GIC account application is entirely online and provides funding details instantly.
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There are two ways to apply to Canadian colleges. They are as follows:
Most of the banks in Canada provide an online process to start a GIC account. After opening the GIC account, the bank will give an invoice with payment instructions to the GIC account to get the GIC payments to Canada credited. A step-by-step procedure is mentioned below:
This option gives you access to your money before the term is up. It contains a lower rate of interest. Your money will be locked up for a 30-90 days waiting period.
You cannot cash out the non –redeemable GIC accounts before maturity. They do have high-interest rates. You will incur a penalty if you are adamant about cashing out before maturity.
The student must transfer $20,635 from their Indian bank account to the GIC account. The fund can also be transferred through remitforex account. On receipt of the amount (within 2-3 days/ can also request ICICI GIC team to speed up the process), a balance confirmation message will be delivered to the customer. It will be through secured email. This message may be submitted for a study permit.
GIC stands for “Guaranteed Investment Certificate” which is a short term liquid investment usually for a year offered by Canadian Banks.
You cannot cash out the non –redeemable GIC accounts before maturity. They do have high-interest rates. You will incur a penalty if you are adamant about cashing out before maturity.
No, you cannot usually add money to your existing GIC account. The return will depend upon the invested/ deposited amount. The return will be received only after the maturity period.
When you open a GIC account, the bank gives you a guaranteed interest rate. This amount is locked up as long as yo ur money is in the account. Always try asking for a better rate with your bank.
No, if you have non-redeemable GIC, it should stay in your account until maturity. If you have a Cashable GIC, you must wait for a short time to get the amount back. However, you can speak with your bank to see if they have any options.
The interest earned is not taxed if GIC is held in a registered investment account. However, it is taxed when non-registered.
Both accounts are similar; you can keep the amount fixed and earn interest. With GIC, your interest rates are accounted for a fixed period, whereas with HISA, your rate could fluctuate. If you need a lump sum saved for life and do not want to take it, GIC is an excellent option. And if you want to redeem the amount in a shorter period, go for HISA.
Most of the banks you deal with provide tools for calculating GIC. It helps you in estimating and calculating better rates.
There is no deadline for GIC transfer. Banks are totally independent from IRCC
Under non-SPP application, Guaranteed Investment Certificate (GIC) is not compulsory. Savings in the bank, other investments, and education loan are all considered part of financial funds. However, documents required under non-SPP are relatively more.
The Canadian embassy has set a minimum requirement of CAD 20,635 as the Guaranteed Investment Certificate (GIC) amount for students applying for a Canadian student visa. This amount must be deposited in a savings account before the visa application. Students can deposit any amount between CAD 20,635 and CAD 50,000 in their respective savings accounts simultaneously.
The investment may only be refunded after a satisfactory verification of your visa/study permit is being declined or cancelled. You must prove this by providing the relevant confirmation that you would have received from the Canadian visa office.
Disadvantages of GICs
You'll need to tie up your money for the entire term if you want to get the full return. The interest rate offered on GICs may not beat inflation. You'll be taxed on the interest earned if the GIC is held outside of a registered account.
On GICs with terms of one year or longer, interest is calculated daily on the principal amount and can either be paid monthly, annually, or compounded annually and paid at maturity.
In order to break the contract, you would have to demonstrate financial hardship and even then, it is at the discretion of the issuing financial institution, as they are under no obligation to let you redeem.
You will get your GIC certificate within 5-10 days if all the documents are proper and accurate.
