Financial capability for a Canadian study visa

The Importance of Financial Capability for Obtaining a Study Visa for Canada

Financial capability is one of the most important documents required for a Canadian student visa. The financial capability section has numerous nuances, and simply preparing a few bank statements and proof of assets does not qualify you financially for a study visa in Canada.

You might be wondering, well, what should I do? Our answer is to read this article carefully. This article includes tips that mainly come from the experience and analysis of hundreds of Canadian study visa cases at RainCity.

Don’t forget, even with the information in this article, every case is unique and should be reviewed and evaluated with a separate scenario. At RainCity, we carefully examine these factors for each of the thousands of clients we have and suggest the best solutions.

Who do we recommend reading this article?

If you are considering applying for a Canadian study visa and want to know the financial capability requirements for a student visa.

If you have applied for admission in Canada and are waiting for your acceptance letter while also keeping an eye on the visa documents.

If you are at the stage of completing your visa documents.

We prefer that you are at stage 1 or stage 2, as you will have enough time to plan during these two stages.

Three Basic Principles of Financial Capability for Canadian Study Visas

Principle One | You must prove that you can cover your expenses.

According to Canadian immigration law, a student applying to study in Canada must be able to cover their tuition fees and living expenses for the first year. For instance, if the applicant’s tuition is $15,000 per year, they need to demonstrate this amount along with the living expenses for the first year and travel costs to Canada (the cost of the ticket to Canada) to the embassy from their bank account or their sponsor.

When applying for a study permit, the financial capability amount is only checked for the first year, but the officer also considers the family’s income and other factors that might indicate the availability of funds in future years.

Principle Two | You must show that you are in a good economic position.

In other words, you need to prove that you can support yourself and your accompanying family members during your stay in Canada. This issue is examined separately from the discussion of financial capability. Here, your overall financial ability and the financial ties you have to your home country will be considered.

Principle three | It’s better to show where your financial resources come from.

Interestingly, according to the guidelines in Document Number 12 from Canada, the level of scrutiny from officers varies depending on the country you are applying from. For high-risk countries (Iran is one of them), officers need to check complete documentation regarding financial transactions, bank letters, and so on. In contrast, for low-risk countries (like those in Europe), just having a one-day bank statement is sufficient for obtaining a visa.

How much is the minimum financial capability required for a Canadian study visa?

However, the question all applicants for studying in Canada have is what is the minimum amount we need to show the embassy?

To answer this question, we should explain that according to Canadian immigration law, you must have at least the ability to support 12 months of tuition and living expenses in Canada. Naturally, if you are married, you need to calculate the expenses for your accompanying family members for a year as well.

But how is this financial ability calculated for Canada? The answer is quite simple:

Find the amount of your tuition for one year from your acceptance letter from a Canadian institution or from the website of the educational center. Then, add that number to the amounts listed below. For example, if your tuition is $16,000 per year and you are single, you would calculate it like this:

16,000 + 20,653 = 36,653

Yes, $36,653 is the minimum amount you need to show is available in your bank account. Naturally, the higher this amount, the more confident the officer will be that you can support yourself. The minimum amount needed to cover the expenses of a student (and their accompanying family members) is detailed in the table below:

Minimum financial capability required in 2024

Number of people traveling to Canada	Annual living expenses (excluding tuition)
1 person	20653
2 people	25690
3 people	31575
4 people	38346
5 people	43491
6 people	49050
7 people	54610
More than 7 people for each additional person	5559

Amounts are in Canadian dollars.

Note: Financial capability for a student visa in Canada is calculated using the same formula.

Conditions for financial capability for a Canadian study permit

In this section, we will outline the conditions of financial capability as well as the conditions for bank letters for a Canadian student visa:

The level of financial capability for a study permit in Canada must cover one year of tuition and living expenses in Canada.

The account opening date should be no less than six months ago (the older the account, the better).

The amounts debited and credited in your account should be reasonable and balanced. This means that, for example, if you’re providing a six-month bank statement, the inflow shouldn’t be significantly higher than the outflow and vice versa, unless the source of the large inflow is clear. If your account meets this condition, at the very least, explain to the officer the reason for these sudden fluctuations in your account.

The amounts deposited into your account should make sense. For instance, if you’re an employee earning 8 million tomans a month, having multiple deposits of 10 million, 20 million, or 30 million tomans in a single month wouldn’t be reasonable unless the source is clear.

If you have a small amount in your account and want to reach the necessary threshold for tuition and living costs for a year in Canada, that amount should be deposited gradually over several months.

If your account balance isn’t very high and you’re in a hurry to get a bank statement and want to suddenly deposit a large sum, that large amount will raise red flags in your account. So, it’s better to get the bank statement after the deposit and keep the deposit date vague.

You need to show the officer that the money in your bank accounts is available. Availability means you can withdraw it whenever you want.

You must convince the officer that the funds in your account belong to you or your sponsor and are not loans or debts. To demonstrate this, your bank statement should cover at least four months and show regular activity in your account. This means that each month, you should have either deposited or withdrawn some amount from your account.

The amount of money in your account should ideally align with your age, work experience, and income level. If it doesn’t match, that’s okay as long as you specify its source.

It’s important to clarify where your financial capability for Canada comes from. Your money shouldn’t be debt or a loan, as that could raise concerns.

What are the requirements for the individual sponsoring a Canadian student visa?

The sponsor is someone who commits to financially supporting you while you’re living in Canada. The sponsor is also required to provide financial documents. But who can be a financial sponsor? Anyone can promise to pay, but there should be a valid reason for someone to become your sponsor.

Ideally, seek a financial capability letter from a first-degree relative as your sponsor. If that’s not feasible, look for other individuals.

Can my spouse be my sponsor? Absolutely. Your spouse can provide their bank statements. No sponsorship letter is needed for a spouse since you and your spouse’s funds are generally considered together.

Can the sponsor be in another country? Yes. The financial backer can be in any country. If your financial supporter is in Canada, keep in mind that this aspect can complicate matters. However, the specifics depend on who it is, and at RainCity, we review each case with its unique scenario and ultimately provide the best solutions through our lawyers.

Documents needed to prove financial capability for a Canadian student visa.

Remember the three main principles of financial capability? We’ll detail each of them in this section of the article.

You can prove sufficient financial capability for a Canadian study visa through the documents we mention below:

Principle One | You must prove you can cover the costs

Proving financial capability via a bank letter and account statements in your home currency.

Bank statements and transaction history for at least the last four months are documents that show your account balance. Iranian banks usually issue bank letters and transaction history in English. Bank letters should be on the bank’s letterhead and come with the bank’s seal and signature. The financial capacity certificate for a Canadian student visa should include details such as the account opening date, account balance, and the account holder’s identification information.

Some banks only show the balance in the local currency, which is Iranian Rial, while others display it as an equivalent in Canadian or US dollars.

Proving financial capacity through a dollar-based bank letter

The requirements for currency accounts for bank proof for a Canadian student visa are slightly different. Some of you might have foreign currency accounts and wonder whether it makes sense to present a foreign currency account for your Canadian student visa. Or perhaps you’re worried about currency fluctuations in your country and concerned that your money will lose value by sitting idle in an account.

Well, that’s completely understandable. No one wants to lose their life savings easily.

Generally, presenting a foreign currency account for a Canadian student visa isn’t a problem, but in your financial letter, you should explain why you opened a foreign currency account. You can explain that you converted your money to dollars due to fluctuations in the value of your country’s currency and to preserve its worth.

Try to use bank receipts to clearly show that the amount withdrawn from a certain account was converted into dollars. This means comparing the statement from the account used to buy the currency with the statement of the foreign currency account and presenting it to the officer to clarify the source of the funds.

Government currency or free currency

Government or free? This debate still exists. Based on our experience with thousands of cases at RainCity, it’s somewhat a matter of luck regarding which officer reviews your case. Some officers are quite informed about this issue. We’ve had a few cases where the officer specifically mentioned that the rate provided by the bank isn’t the actual dollar rate. Of course, we’ve also had hundreds of cases where the officer didn’t get involved in this issue.

Our recommendation is to calculate your financial capacity using the dollar rate in the free market.

Proof of financial capability through a bank account in Canada

If you have a bank account in Canada under your name, deposit the amount required for financial capability for the Canadian study visa that we mentioned earlier, and submit the related bank letter. If your father or mother has a tourist visa and has opened a bank account during their trip to Canada, you can also include those accounts.

Proof of financial capability through a university scholarship letter

If you have received a financial grant from the university, be sure to submit the corresponding letter along with other financial documents. If the grant covers part of your first-year tuition, you will need to provide sufficient bank proof to cover the remaining tuition and living expenses for a year.

Can the grant amount be considered part of the bank amount to cover first-year expenses? Yes.

Proof of financial capability through tuition payment receipt

If you have made a deposit for admission to a Canadian university, you should add the payment receipt to your financial documents. The deposit usually covers part of the tuition for one semester or one academic year.

Second principle | Show that your overall financial situation is good

Proof through ownership documents

Your documents are not cash, so they cannot replace bank letters. However, they still demonstrate your financial situation. Financial documents also indicate your economic ties with your home country.

Property documents such as land deeds, house deeds, shop deeds, or rental agreements for a house, shop, or land you have leased are all proofs of your financial capacity and means. It is advisable for property documents to be officially translated and the translation to be recent. Property documents can be in your name or, if you have a financial sponsor, in the sponsor’s name.

All the documents mentioned above will prove your financial capacity and means to the Canadian embassy. How you prepare each document is also very important. Experienced consultants at RainCity can assist you with specialized advice in this regard.

Proof through the lowest income level – LICO

LICO stands for Low-Income Cut-Off, which refers to the minimum income level used to indicate the poverty line in urban areas of Canada with a population of at least half a million. In other words, if your income is below the LICO threshold, you are considered below the poverty line in Canada.

Canadian immigration officers use the LICO table as a tool to assess the financial capability of applicants and their sponsors as well.

For example, in the case of a Canadian study visa, officers expect you to demonstrate at least 75% of the LICO amount in your bank account.

LICO Table for 2024

Number of Family Members	LICO	75% of LICO
1 person	27514	20635
2 People	34254	25690
3 People	42110	31575
4 People	51128	38346
5 People	57988	43491
6 People	65400	49050
7 People	72814	54610
For more than 7 People: this amount is added per person	7412	5559

Amounts are in Canadian dollars.

Principle Three | Always Provide Resources for the Officer

Providing financial support evidence through a job letter and income

A logical way to show your financial capacity is by providing a job letter. The job letter should mention the job title, salary, employment start date, and employer information. Prepare the job letter on company letterhead and with the manager’s signature and stamp.

Other employment documents that can prove your financial capability include insurance records, pay stubs, employment letters, and, if the sponsor is retired, a retirement letter. Business licenses, employment contracts, and if you own an active business, company registration documents are also valid employment documents to prove financial capability.

If you have a sponsor, be sure to show your sponsor’s financial resources as well. Remember, it’s important for Canada to ensure that there will be financial support for you in the coming years (even though you’re currently only proving financial capability for one year).

Proving financial capability for student dependents

If your spouse and child are accompanying you on your trip to Canada, you need to add their living expenses for one year to your own costs. Financial documents proving your spouse’s financial capability include a bank letter, account statements, a job letter, pay slips, insurance records, or their employment contracts.

If you have a registered company, documents related to it, such as the official newspaper, articles of association, and other documents, can showcase your spouse’s financial capability as a dependent. Any property documents we mentioned earlier also serve as proof of their financial ability.

If your spouse shares a bank account with you or their income is deposited into your account, that also demonstrates their financial capability. Even if your spouse isn’t working and cannot provide financial documents, as long as you can show that you have enough in your account to cover their living expenses in Canada for a year, there shouldn’t be any issues proving your spouse’s financial capability.

How much financial capacity is needed for a Canadian tourist visa for dependents?

If you’re a parent of a student, or if your spouse has a student or work visa, you will still need to provide proof of financial capability.

But how much?

It should be the amount you need for the trip. For example, if your trip costs $10,000, you need to show at least $10,000 in financial capability. Remember to account for unforeseen expenses, like medical issues, within this amount.

The financial requirements for a Canadian tourist visa differ from those for a study permit. On average, you should provide around $2,000 for one month of stay in this country. Therefore, if we consider a maximum duration of six months, you need to show about $12,000 as financial capability for your tourist visa.

Reviewing cases of rejection due to financial capability

In rejection letters from Canada, there are a number of default points that are mentioned, one of which is your financial situation. If you’ve done everything stated in this article and you’ve still been rejected, with the officer mentioning financial issues again in the rejection letter, don’t doubt anything. You’ve done your job right.

The financial capability topics that officers bring up in rejection letters fall under one of the following categories:

The source of the money in the bank is unclear.

The overall financial and economic situation of the applicant for studying in Canada and paying tuition does not seem reasonable.

It seems the applicant does not have a stable economic situation in their home country.

Don’t doubt the principles and regulations!

The financial capability topics that officers bring up in rejection letters fall under one of the following categories:

The source of the money in the bank is unclear.

The overall financial and economic situation of the applicant for studying in Canada and paying tuition does not seem reasonable.

It seems the applicant does not have a stable economic situation in their home country.

Financial ability for extending a study permit

The rules for extending a study permit and visa are explained in detail in another article. But in short, when extending a study permit or visa, you should also meet the financial conditions mentioned in this article.

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Frequently asked questions

How long is the validity of the financial capability letter?

From the time the bank letter is issued, its validity is one month, but it can be used for up to 40 days for a Canadian student visa.

Can having a scholarship replace bank funds?

If the scholarship covers the entire tuition and living expenses for a year, there is no need to provide bank capability. However, if the funding covers part of the expenses, you must provide bank capability with sufficient balance to cover the remaining costs.

Do they contact the Canadian embassy to verify the authenticity of the bank capability letter for the Canadian student visa?

Yes, it might be possible. Of course, this is rarely the case, but you should always be prepared for it and not empty your account after submitting your visa application.

Is providing stocks acceptable for the financial capability for a Canadian student visa?

Stocks, like those traded on the stock exchange, are not acceptable as proof of funds because their value fluctuates and they aren’t a stable financial source; they can even go negative. Keep in mind that your proof of funds should be available. Stocks can be available one day and gone the next.

Is it possible to present Bitcoin or other cryptocurrencies for financial capability?

The nature of cryptocurrencies is their dynamic volatility. So these types of currencies are always in flux, which means they cannot be used for submission to the Canadian embassy. Maybe one day the Canadian immigration office will make a statement about this. When that day comes, we will definitely share it with you.

How can the financial capability for a Canadian student visa be strengthened?

If you don’t have enough money to cover tuition and living expenses for a year in Canada, and you can’t provide the necessary proof of funds, it’s better to have immediate family members, like your spouse or parents, act as your financial sponsors.

Does the financial sponsor for the Canadian student visa need to provide a commitment letter?

Yes. The only situation where you won’t need to provide a financial commitment letter from your sponsor is if your spouse is your financial sponsor.

Can I provide the financial capability and cash flow of my company?

Yes. You can present your business account. However, it shouldn’t be treated as the main account to demonstrate your ability to pay tuition and living expenses during the first year; it’s more to show that you have a good business.

Company accounts are tied to the business itself, and if, for example, the company goes bankrupt, that account will no longer be accessible. Any funds you show must be available. The proof of funds in a business account may be accessible today, but it could be unavailable tomorrow. Therefore, we do not recommend presenting a business account as the main proof of funds.

Is it possible to get a loan and submit a financial capability letter?

No. Loans, whether in Canada or Iran, cannot be presented as your proof of funds for obtaining a visa. A loan is a type of debt and essentially not your money.

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