Can Someone else Pay for my GIC in Canada?

Manmeet Kaur
[Published 23 Nov, 2023 | 03:55 PM]
About Author - 6 min read
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International students who apply for a Canada Study Visa through the Student Direct Stream (SDS) are required to fulfill certain eligibility requirements. One of them is to have a minimum of CAD 10,000 in their Canada GIC account from a Canadian financial institution like the Royal Bank of Canada (RBC). However, not everyone may have the required funds readily available to invest in a GIC. Thus, the question “Can friends contribute to your GIC account?” arises.

The straightforward answer is yes, friends can contribute to your GIC account, but the process may involve some complexities and considerations. Let's delve into the details.

What does the "GIC Account" mean for international students in Canada?

GIC means Guaranteed Investment Certificate and is an investment account. It is a financial product that banks and other financial institutions offer to international students in Canada. This account acts as proof that students have money to pay for their studies and living expenses. 

A fixed amount of money is deposited in the GIC account, purchased under the RBC International Student GIC Program, and in return, students receive fixed monthly payments over a predetermined period. It's a way to ensure financial stability during their studies in Canada. These are as per the rules set by the Canadian government for students who wish to study in Canada through the Study Direct Stream (SDS) program.

Is it possible to get the GIC account funded by friends?

Yes. You can apply for a student permit in Canada with the help of a friend’s affidavit of support as proof of funds. The friend would be required to provide proof that they have sufficient funds to support you during your stay in Canada. They can use bank statements, a letter from their employer, or pay stubs as proof.

Moreover, the friend would be required to provide a signed affidavit of support, which is a legal document confirming their willingness and ability to support you financially. It is important to note that this is one way to demonstrate proof of funds, and the Canadian government may also require additional documentation.

Joint GIC Accounts:

A more common approach to getting contributions from friends is to open a joint GIC account. This allows multiple people like friends, family, or business partners to be co-owners of the account. Each co-owner will have the right to the account and the GIC will operate under a ‘survivorship’ model, meaning if one co-owner passes away, the remaining co-owners retain full control of the account.

By opening a joint GIC account, friends can pool their money in the account, which can be beneficial for those who may not have the necessary funds individually but want to take advantage of the GIC's stable returns.

Read More:- What is GIC for Canada Study Visa?

Potential Considerations and Challenges

While the friends can fund your GIC account, it is important to keep in mind the following challenges - 

Trust and Communication

Be clear about your goals with friends and family. Openly communicate about the terms, investment goals, and how you want to handle the returns to avoid future complications. 

Legal Implications

Opening any account together, especially a GIC account has its own legal complications. Thus, we advise you to consult with an immigration lawyer to handle the matters professionally and draft any necessary agreements.

Withdrawal Restrictions

GICs often come with withdrawal restrictions, especially if they have a fixed term. Therefore, co-owners should be aware of these restrictions and agree on the best course of action if the need for an early withdrawal arises.

Consider Taxes

The income generated from the GIC may be subject to taxation. Co-owners should know of the tax implications and plan accordingly, possibly consulting a tax professional for guidance.

Exit Strategy

You must plan and agree upon an exit strategy. If one friend wants to withdraw their share of the investment or dissolve the joint GIC account before the maturity date, a plan should be in place to address such situations.

Friends can indeed contribute to your GIC account through the establishment of a joint GIC. While this approach can be a collaborative way to invest and harness the benefits of a GIC, it requires careful planning, open communication, and a clear understanding of the legal and financial implications involved. 

As with any financial decision, seeking professional advice from the Best Study abroad consultant in Delhi and having a well-defined agreement among friends can help navigate potential challenges and ensure a successful joint investment in a GIC.

Good luck!

Also, Read On Quora:-Is GIC compulsory for a Canadian student visa?