How a GIC Can Help You Succeed in Canada as an International Student

In this post, we discuss how investing in a GIC can help a student looking to study in Canada. It covers everything from your study permit application documentation to budgeting for life as a student once you land in Canada.

What is a GIC?

A GIC (Guaranteed Investment Certificate) is a fixed-term investment with a guaranteed interest rate. It’s a specific type of investment product in Canadian banking, and International Students can apply for a GIC program before applying for their Canadian study permit.

When you buy a GIC, you deposit a certain amount of money with a Canadian bank for a set period — often several months or years. In return, the bank guarantees that you’ll get your full amount back, plus some interest. For most GIC types, the interest rate is agreed on in advance, so you’ll know exactly how much money you’ll earn by the end of the GIC term. It’s a low-risk investment in Canada.

Why Do International Students Choose GICs in Canada?

There are many reasons why buying a GIC (via a pre-arrival program) makes sense for international students, including:

• It’s accessible, with a minimum investment of $5,000 required
• It’s flexible – choose the right GIC type and term for you.
• It’s a safe investment – You are guaranteed to get your initial investment back. Plus, traditional GICs offer a fixed interest rate so you know how much you’ll earn.

But there are two benefits that really stand out:

Streamline Your Study Permit Proof of Financial Support Documentation

One significant benefit is for those international students who are eligible to open a GIC account before arriving in Canada: it can help you streamline the documentation required for your study permit.

To receive your study permit, you must show that you have adequate funds to support yourself during your studies. The required amounts are reviewed annually and are different in Quebec compared to the rest of Canada.

To prove to Canada’s government that you can support yourself while you are in Canada, you need to prove you have enough funds with at least one of the following:

• A GIC from a participating Canadian financial institution
• Proof of a student or education loan from a bank
• Your bank statements for the past 4 months
• A bank draft that can be converted to Canadian dollars
• Proof you paid tuition and housing fees
• A letter from the person or school giving you money; or
• Proof of funding paid for a scholarship or a Canadian-funded educational program.

To be clear, all the above proof of funds documents are equally acceptable to Immigration, Refugees and Citizenship Canada (IRCC) for the purposes of your study permit. What’s important is that you’re able to show that the funds are yours (or in an account in your name) and can be used to support your studies.

So, how can a pre-arrival GIC help streamline your documentation for a study permit application?

To start with, your GIC will be in Canadian Dollars, so you don’t need to deal with the hassle of fluctuating currency exchange rates. A GIC is also needed for your permit application and the funds in the GIC account are listed in your name, which means you don’t have to collect and translate multiple months’ worth of bank statements or submit attestations that you have access to the funds. For many students, this is a convenient option.

It’s important to bear in mind that a GIC doesn’t ‘guarantee’ your study permit will be approved. It’s just one part of your application. But if the worst happens and your study permit is rejected, you can close the GIC and withdraw the funds to your bank in your home country, subject to any fees that may be payable.

GICs Can Help International Students Manage Money

Beyond just helping you meet your mandatory requirements for immigration purposes, a pre-arrival GIC can be a powerful tool for managing your money during your studies in Canada.

Here are some of the budgeting benefits of opening a pre-arrival GIC:

Higher Interest Than a Savings Account 

The interest you earn on a GIC is often higher than the interest you would earn on money parked in a savings account. So, a GIC can help you get ahead with a little boost from higher interest.

Structured Access To Your Funds 

Scotiabank gives you three options for how you’ll receive your funds from your GIC (that you opened via your Scotiabank Student GIC Program) once you arrive in Canada. One GIC option you can choose allows you  to receive your investment funds, plus interest, throughout the year as monthly equal ‘payments’  that can help to manage your finances while you study.

Practice Sticking To A Budget 

Again, if you choose to receive monthly payments, your pre-arrival GIC can help you practice sticking to a budget. Money management is a skill, so putting safeguards in place while you build good habits and practice money skills is critical. Because your GIC pays out a fixed amount on a schedule, you know how much money you have to work with each month. This can make it easier to plan for rent, food, and other essentials without overspending.

Flexibility

The Scotiabank Student GIC Program gives you three options for your GIC and also, allows you to do a mix-and-match approach among the 3 options to build a structure that works for you. When you go to a Scotiabank branch in Canada to activate your pre-arrival GIC, the financial advisor can guide you with deciding which options would work best for you based on your individual financial situation and budgeting experience.

Who Can Open a GIC?

All international students can open a GIC once in Canada, but international students from certain countries can open a GIC before coming to Canada — even before applying for a study permit.

For example, the Scotiabank Student GIC Program allows international students from 19 countries to invest from $5,000 CAD to $50,000 CAD. Students from these countries are eligible to open a pre-arrival GIC:

• Brazil
• Chile
• China
• Colombia
• France
• Germany
• India
• Mexico
• Morocco
• Pakistan
• Peru
• Philippines
• Saudi Arabia
• Senegal
• Spain
• United Arab Emirates
• United Kingdom
• Venezuela
• Vietnam.

Scotiabank’s Student GIC Program can help you meet IRCC’s proof of financial support requirement and transition to life in Canada smoothly. It also means you don’t need to travel with large amounts of cash or wait for funds to arrive after you do, which is safer and more convenient.

Once you arrive, you then book an appointment at a Scotiabank branch to set up a student chequing account. At this appointment, you can transfer some or all of the funds from your pre-arrival GIC account into your new student chequing account.

Students from other countries who cannot participate in the pre-arrival Scotiabank Student GIC Program can visit a branch upon arriving in Canada and open student bank accounts and a regular GIC.

How Does the Scotiabank Student GIC Program Work when Applying for a Study Permit in Canada?

Step 1: Apply for the Scotiabank Student GIC Program. This is an online application form.

Step 2: Once approved, wire transfer at and up to $50,200 CAD to Scotiabank in Canada. The amount you wire will be credited to your GIC, less a $200 fee.

Step 3: Scotiabank will issue you an Investments Directions Form which confirms that you have money with Scotiabank in Canada.

Step 4: Apply for your study permit and attach the Investments Directions Form as one of the proof of funds.

Step 5: Once you arrive in Canada, open a student bank account with Scotiabank. You will need to bring certain documents with you when you open your account, including your Foreign passport, Study Permit (IMM 1442), Investment Directions Form, and your student ID card or other proof of enrollment in your educational program. If you are studying in Quebec, you should also bring  your Quebec Acceptance Certificate (CAQ).

Step 6: Choose how your international student GIC funds will be disbursed to you. You can choose to:

1. Receive part or all of your GIC funds into your Scotiabank chequing account, or
2. Buy a 1-year non-redeemable Guaranteed Income Optimizer (GIO) ($5,000 CAD minimum) and get equal payments each month – using all or a portion of your funds, or
3. Buy a 1-year Cashable Guaranteed Investment Certificate (GIC) ($2,000 CAD minimum) and safeguard your funds – using all or a portion of your funds.

You can also mix and match among these three options, to really build a budget that best suits your needs.

Here’s what that might look like for three different students who each opened their international student GIC with $12,000 CAD, plus the $200 application fee:

Other International Student Bank Accounts to Consider

It’s important to manage your banking as soon as you can after you arrive in Canada. Having a Canadian chequing account allows you to more easily adapt to life in Canada. It will also help with getting a phone plan, organizing accommodation, and a bunch of other first-month to-dos.

Here are some accounts to consider:

Opening a No-Monthly Fee Chequing Account for Students

A student chequing account is usually used for everyday activities, like withdrawing cash, paying bills, and receiving money. Students may be eligible for no-monthly fee chequing accounts for the duration of their studies, so we recommend looking for an account with no monthly account fees while you’re studying.  You also need a chequing account for depositing cheques, drafts or any money incoming money transfers from overseas.

Scotiabank, for example, offers the “Preferred package for Students and Youth”. This account does not have a monthly account fee and allows unlimited debit and Interac e-Transfer^† transactions, . Students can also apply for an unsecured credit card through this plan, even without a credit history in Canada.

What You Need to Open a Student Bank Account in Canada 

Here are the documents you need to open a Scotiabank “Preferred Package for Students and Youth”  in Canada as an international student:

• A government issued photo ID such as your passport.
• Your Study Permit (IMM 1442) or Temporary Resident Visa (TRV).
• Proof of enrollment from your Canadian Educational Institution.

Student Credit Cards

Responsible credit card usage enables you to build and improve your credit score and credit history. In other words, getting a credit card can be an important part of building your bright financial future in Canada.

Scotiabank offers a specialized program for international students to apply for an eligible credit card, even without Canadian credit card history. For example, Scotiabank offers the Scotiabank® Scene^TM Visa Card, which can earn rewards with everyday purchases that can be redeemed for groceries to home improvement, to movies and dining out. Getting and responsibly using a credit card can help you build your credit score in Canada.

Learn more about Scotiabank’s banking solutions for students in Canada

This article is provided for information purposes only. It is not to be relied upon as financial, tax or investment advice or guarantees about the future, nor should it be considered a recommendation to buy or sell. Information contained in this article, including information relating to interest rates, market conditions, tax rules, and other investment factors are subject to change without notice and The Bank of Nova Scotia is not responsible to update this information. All third-party sources are believed to be accurate and reliable as of the date of publication and The Bank of Nova Scotia does not guarantee its accuracy or reliability. Readers should consult their own professional advisor for specific financial, investment and/or tax advice tailored to their needs to ensure that individual circumstances are considered properly, and action is taken based on the latest available information.