Comprehensive guide to Proof of Settlement Funds – Canadian Immigration (Express Entry)

As an applicant for permanent residency in Canada under Express Entry, proof of funds is a critical factor that can significantly impact your application. In this discussion, we will cover what proof of funds is, what can be accepted, and what may not be accepted.

Under Canadian Immigration Law – IRPA, subsection R76(1)(b)(i) requires that skilled workers have unencumbered and transferable funds that are equal to one-half of the minimum necessary income applicable to the skilled worker and their family members.
Additionally, it is also a requirement that the settlement funds’ requirements and criteria must be met when the application is made and when the permanent resident visa is issued.

ICCRC has set guidelines for the minimum funds required to establish oneself in Canada.
As a basic requirement for evidence of your settlement funds for your application, you must provide letters as below:

• • For proof, you must get official letters from any banks or financial institutions where you’re keeping money.

• • Letter(s) must

• • be printed on the financial institution’s letterhead

• • include their contact information (address, telephone number and email address)

• • include your name

• • list outstanding debts such as credit card debts and loans

• • include, for each current bank and investment account, the

     

    • • account numbers
    • • date each account was opened
    • • the current balance of each account
    • • the average balance for the past 6 months

The details of the requirement of documents for settlement funds are also indicated on the IRCC website – under their operational instructions and guidelines governing Express Entry. The link is here.

What we understand:

Proof of funds or settlement funds are only required for applicants who are submitting their application under the Federal Skilled Worker (FSW) or Federal Skilled Trade Category (FSTC) program.
Applicants who are eligible under the Canadian Experience Class (CEC) or those with a valid job offer do not need to show any proof of funds to process their PR application.

As an applicant, you must prove to the Canadian government that you have enough monetary funds to support yourself and any accompanying family members when you arrive in Canada. Even if your family members are not accompanying you, you must still show funds equal to your family size. The funds must be unencumbered, free of liens, not borrowed, and readily available in transferable currency for settlement in Canada.

If your spouse is coming with you, you can count the money you have together in a joint account. You may be able to count money in an account under their name only, but you must prove you have access to the money.

Assessment of Funds and Exchange rate fluctuations

When providing proof of funds for immigration or other purposes in a currency other than Canadian dollars (CAD), it is important to consider the potential impact of exchange rate fluctuations on the amount of funds required. To ensure that your proof of funds remains valid and meets the requirements of Canadian immigration authorities, it is advisable to maintain an amount of funds in your account that is equal to or greater than the applicable amount for your proof of funds, as determined by the Canadian government, as converted into CAD using the Bank of Canada’s exchange rate monitor.

By monitoring the Bank of Canada’s exchange rate trends, you can track the recent highest point and estimate the amount of funds you need to maintain in your account to account for fluctuations in the exchange rate. It is important to ensure that the funds shown in your account are equal to or greater than the applicable amount for your proof of funds on the day that Canadian immigration authorities will verify your documents.

How much funds are needed?

This table shows the minimum amount you need to immigrate to Canada as of June 9, 2022. This amount is updated every year based on the applicable LICO (low-income cut-off) for the current year.

Loans, Debt, and Liabilities

As per ICCRC, you are also required to show the list of liabilities from the bank, including loans, credit card debts, or similar.
In such cases, any loans against assets do not impact the ICCRC requirement of POF. Hence house loans, car loans, etc. do not have any negative impact.
Regarding consumer loans/debt like personal loans/credit cards, it is ideal (not mandatory) to have the amount of debt covered when providing POF(proof of settlement funds). This means that if such debt is $1000 and your POF requirement is $13310, then the ideal minimum available balance would be $14500 or more.
However, unless this loan amount is big and covers a large portion of the POF, it “may” be disregarded by ICCRC when considering POF. Indeed ICCRC takes a comprehensive approach to previous debts and liabilities.

It is best to address your liabilities and your settlement plan, explaining how you plan to settle your liabilities without affecting your #POF.

Type of Funds

You may be wondering what type of funds you can use and what type of proof is required. Well, there are several things to consider:
Savings/current/salary A/C: If you have savings that meet or exceed the required amount, you can submit a copy of your bank statement for the past six months indicating the funds in your account. You should demonstrate that the funds have been in your account for 6 months, and if they have been recently transferred, you will need to provide information on their source.

It is essential to demonstrate that the statement is not submitted immediately after receiving payment and that the funds will not be depleted from the account the following week. If your money is held in multiple accounts, you will need to provide information on each account up to the required amount.

Shares, Bonds, etc.: This type of investment may not be acceptable for IRCC for this purpose, as these are volatile accounts and cannot be accepted at face value. If you want to use this type of funding, you will need to liquidate them in a suitable bank account and send the statements as above.

Possessions: Again, this is not acceptable to IRCC. You will need to liquidate the assets and deposit the money in a suitable account. This applies to vehicles, antiques, value items, jewelry, gold bullion etc.

Real Estate: Real estate is one of the most popular investment options worldwide, with significant amounts of money being invested in properties around the globe. Many people plan to sell property owned in their home country before landing in Canada and use the equity to establish themselves. Therefore, Real Estate and its value by itself can not be used as POF, but you may liquidate it and show the sale deed as evidence of deposit and offer bank details as mentioned above.

BitCoins/ Cryptocurrency: Due to the lack of clear legislation on this mode of funds, they are not accepted as POF. They are also known to be speculative in nature. If you hold these funds, it is best to encash them in your account and show the transaction receipt. You can further explain it in LOE.

Showing funds held in joint accounts and spouse’s accounts
If an applicant’s spouse accompanies, the applicant can show the funds held together in a joint account to meet the PoF requirement. However, to show the funds for meeting the PoF requirement, held in an account under the spouse’s name only, the applicant must prove that they have access to the funds. This can be done by the dependent spouse stating in writing that the funds are freely accessible by the primary spouse to be used as they see fit and are free of any obligations.

Similarly, if an applicant has a joint account with their parent, they will have to execute an affidavit affirming that the applicant can use the funds held in the joint account to meet the PoF requirements

What cannot be used as PoF?

Any asset that cannot be readily liquidated and the price cannot be ascertained immediately cannot be used to meet the PoF requirements. Therefore, real estate assets, stocks etc. cannot be used.
However, bank deposits, treasury bills, bonds, provident funds (India), Life Insurance Policy (only unconditional surrender value can be used. whole life insurance, term life cannot be used), and similar monetary investments can be readily liquidated, can be used for PoF, without liquidating them.

So, as a rule of thumb, any funds that can be liquidated on-demand and at face value may be accepted as proof of funds.

If you meet the majority of your PoF over the required age and make small deposits nearer to your application to meet the fund requirement, then you may not have to prove the source of such deposits. The proportion of the deposits should not be more than 5-10% if you do not wish to show their source.
Though, It’s also a good idea to clearly mention the details of your PoF if they are not in the required format as per IRCC. Please don’t leave it to their automatic understanding.

N.B. You do not have to show that you have these funds if you have arranged employment in Canada and are applying under CEC.

Age of Funds Requirement

IRCC requires an official letter from the bank stating account details, liabilities, and average monthly balance for the past six months. It’s important to note that this doesn’t mean the funds must be six months old. Immigration law doesn’t specify any particular duration for maintaining funds. This requirement is to verify that there are no recent large deposits in the account that are used to meet the proof of funds requirement and that these funds are unencumbered and free from any liens. It’s crucial to ensure that these funds are not borrowed or obtained as a loan.

Progressive build-up of funds over the last few months through savings, deposits and sale of assets is acceptable.

Gift Deed

Using gift deed to meet PoF requirement
If you are invited to apply and cannot meet the PoF requirements, you can consider meeting this by getting the funds in the form of a gift. A gift, as defined under the law, is the “voluntary transfer of property (movable or immovable) from one person (the donor or grantor) to another (the donee or grantee) without full valuable consideration (exchange of money or property) or an expectation of return. When executing the gift deed (notarized affidavit), it should meet the formalities of the country in which the gift deed is being executed. The gift deed will also overcome the six-month average balance requirement as the funds will be shown as a gift to the applicant. This is acceptable as the source of funds does not meet the aging requirement.

Please note that some of the requirements of provincial nominee programs vary and may be different from the federal requirements under Express Entry.
Provinces and PNP programs such as #SINP (Saskatchewan) do not accept gift deeds for lack of aging funds. As per their requirement if the funds have not aged and have not been maintained for at least 3 months at the time of application submission, then they will refuse the application. Kindly refer to the provincial and PNP program guides when preparing your application for nomination for updated criteria and requirements.

Not acceptable as proof of funds

Debentures, credit cards, lines of credit, gold, cash, real estate, or value of businesses, net worth assessment and certificate, cryptocurrency, and similar are not accepted as settlement funds.

Other Options for Proof of Funds

Provident funds or similar retirement funds: are generally accepted by provincial programs and may be accepted by IRCC, although it has not been specifically mentioned by IRCC.
An email inquiry to IRCC New Delhi confirmed that such funds would be accepted as POF. Since POF is usually verified by the LVO and they are aware of local country-specific funds and requirements, it is likely that PF or similar retirement funds will be accepted. However, it ultimately remains at the discretion of the assessing visa officer.

Stocks and Mutual funds: on the other hand, are subject to market risks and conditions and may not be valued at face value on demand during the entire application process. As a result, there is a considerable grey area in their acceptance as POF.
Some applicants have been successful in producing their Mutual Fund statements from the holding institution and obtaining their approval, but in most cases, the amount they showed exceeded the actual amount required on their application hence one should use this with caution.

I know of a few applicants who got procedural fairness asking for clarity on Mutual Funds and further showing why these funds should be considered safe instruments. They had to liquidate their funds and show their liquid funds as POF in those cases. Hence these are not recommended.

Life Insurance Policy – If you can provide a certificate from the institution holding your funds stating the surrender value of the policy, which can be encashed on demand, then that amount may be used as #POF, but this would again, be at the discretion of the assessing visa officer.

Proof of Funds at the time of first landing

While evidence supporting settlement funds (#POF) is not commonly asked for at the time of landing, it’s best to have it available with you if the Border Officer chooses to ask for it.
Most people are not asked for proof of funds or it’s just a fleeting question – “How much money are you carrying with you today?”
You must be prepared to show #POF if and when asked by the border officer at the time of examination of your CoPR during your first landing.
In response to a recent query sent to the New Delhi Visa Office with regards to Proof of Funds at the time of landing, they replied:

Acceptable proof of funds are:
-bank accounts in your name or the name of your accompanying spouse/common-law partner;
-cashable investments in your name or the name of your accompanying spouse/common-law partner;
-cashable fixed deposits in your name of the name of your accompanying spouse/common-law partner.

Not acceptable are:
-bank accounts in someone else’s name;
-bank accounts that are joint in your name and someone else (other than your accompanying spouse/common-law partner);
-bank accounts in the name of your spouse who is not accompanying you to Canada ;
-property valuations;
-vehicle valuations;
-jewelry valuations.

You are not required to carry your funds in cash when you arrive in Canada. 
You are, however, required to show documentary evidence that you have the funds available (in bank accounts or cashable investments) and that they can be transferred to Canada. A port of entry officer in Canada may seek to confirm these funds before granting you permanent residence along with your dependents.

As per this IRCC link, you may bring any amount of money to Canada as you wish; there is no limit. However, if you are carrying cash or other financial instruments equal to or greater than $10,000, you must declare it to the border officer.
The link for CBSA regarding this information is here