E-APR POF and 6 month average balance

[anaskw]

Hello guys,,,

What I understand from proof of funds that we need to submit a bank statement for a period of 6 months at where the current balance must be more than the required funds and average balance almost close to the required funds too.

I need your help to clear these doubts:
1- my bank doesn't provide average balance. What to do? Should I submit 6 month statement, and submit a letter of my calculation for average balance.

2- If it's not required to do average balance calculation by myself and it is only required to submit 6 month bank statement, then it's great. Otherwise, let's me know if my way of calculation whether correct or not. To calculate 6 month average balance I need to sum balances over 180 days then divide the amount on 180. And for period there is no transaction I can say for example at day Dec1 the balance was 1000$ (let's say) and it keeps constant till Dec15, so I would say the balances from Dec1 to 15 is 15K, and go on till calculating the same for 6 months.

3- If there was a difference between current balance and average balance, how much is it acceptable?

4- I heard LOE (Letter Of Explanation), is there any form or format to it, or is it just any normal letter to explain some situation on my application/case?

Thank you
Anas

 

[anaskw]

Asivad Anac I appreciate to have your review on my questions.. Thanks

 

[manpreetdhindsa15]

Hi Anas,

1. Get a current Balance certificate from your bank on Letter head, stamped and signed by Bank Authorities , Submit 6 month bank statement, this should suffice.
2. No hard and fast rule to calculate average balance.
3. No defined limit for the mismatch, if your average balance and Current balance both are above minimum funds required no need to worry, otherwise if some major credit was done in order to provide POF, give an explanation upfront, like most of people submitted a letter to prove that the money received is a gift from some relative..
4. Its a normal letter to explain some situation.

 

[number411]

And for period there is no transaction I can say for example at day Dec1 the balance was 1000$ (let's say) and it keeps constant till Dec15, so I would say the balances from Dec1 to 15 is 15K, and go on till calculating the same for 6 months.

If the balance was 1K $ for 15 days unchanged, then average balance is just 1K and not 15K.

anyway, for your other questions, you can either average it by daily closing balances, weekly closing balances or monthly closing balances. Since you are anyway providing a bank statement for 6 months, CIC will be able to verify if funds were there for all those 6 months or were infused and taken out weekly/monthly just to defraud the average balance calculation.

in my case, i calculated the monthly closing average balances, wrote a letter as per what CIC wants and took it to the bank manager, and he quickly verified the facts and gave me a statement.

it is preferable to have both current balance and average balance safely over the limit required by CIC, for example CAD 12K for single applicants. If both are over 15K, then a difference of 10-20% between the two doesn't matter as long as both are over the limit required.

 

[StAnger]

Hello guys,,,

What I understand from proof of funds that we need to submit a bank statement for a period of 6 months at where the current balance must be more than the required funds and average balance almost close to the required funds too.

I need your help to clear these doubts:
1- my bank doesn't provide average balance. What to do? Should I submit 6 month statement, and submit a letter of my calculation for average balance.

2- If it's not required to do average balance calculation by myself and it is only required to submit 6 month bank statement, then it's great. Otherwise, let's me know if my way of calculation whether correct or not. To calculate 6 month average balance I need to sum balances over 180 days then divide the amount on 180. And for period there is no transaction I can say for example at day Dec1 the balance was 1000$ (let's say) and it keeps constant till Dec15, so I would say the balances from Dec1 to 15 is 15K, and go on till calculating the same for 6 months.

3- If there was a difference between current balance and average balance, how much is it acceptable?

4- I heard LOE (Letter Of Explanation), is there any form or format to it, or is it just any normal letter to explain some situation on my application/case?

Thank you
Anas

2- An average balance is calculated by dividing the beginning balance plus the ending balance by two. A weighted average balance will take into account how long the balance remained at specific levels during the measurement period, which is typically a month or a financial quarter long. The purpose here is to check any major transactions in your account which could raise a red flag, as this could be due to a loan to meet the minimum POF. If you are showing the 6 months bank statement, the officer can very well find out any such transactions.

3- If you have had a normal transactions over the past months, you need not worry about deviations. If their indeed in a huge deposit, you will have to send necessary proofs to show the source of these funds. Your average balance need not be above minimum POF. Your net balance should be above minimum POF.

 

[anaskw]

Hi Anas,

1. Get a current Balance certificate from your bank on Letter head, stamped and signed by Bank Authorities , Submit 6 month bank statement, this should suffice.
2. No hard and fast rule to calculate average balance.
3. No defined limit for the mismatch, if your average balance and Current balance both are above minimum funds required no need to worry, otherwise if some major credit was done in order to provide POF, give an explanation upfront, like most of people submitted a letter to prove that the money received is a gift from some relative..
4. Its a normal letter to explain some situation.

Thank you for prompt reply.
1- why do I need for a current balance certificate, if the bank statement already shows the current balance. Note that the statement will be print on the bank letterhead (black and white only) and stamped (not signed).
2- sorry, I didn't get you here. Should I calculate the average by myself, and was my calculation method correct?

 

[anaskw]

If the balance was 1K $ for 15 days unchanged, then average balance is just 1K and not 15K.

anyway, for your other questions, you can either average it by daily closing balances, weekly closing balances or monthly closing balances. Since you are anyway providing a bank statement for 6 months, CIC will be able to verify if funds were there for all those 6 months or were infused and taken out weekly/monthly just to defraud the average balance calculation.

in my case, i calculated the monthly closing average balances, wrote a letter as per what CIC wants and took it to the bank manager, and he quickly verified the facts and gave me a statement.

it is preferable to have both current balance and average balance safely over the limit required by CIC, for example CAD 12K for single applicants. If both are over 15K, then a difference of 10-20% between the two doesn't matter as long as both are over the limit required.

I meant 15K is the sum in a quick way of calculation by just multiplying the balance at first day with number of constant days. I didn't meant the average balance is 15K.
If I do my calculation, I can't get my calculation signed by my bank. I can just calculate the average and submit it as LOE additional to stamped bank statement.

thanks for the reply.

 

[anaskw]

2- An average balance is calculated by dividing the beginning balance plus the ending balance by two. A weighted average balance will take into account how long the balance remained at specific levels during the measurement period, which is typically a month or a financial quarter long. The purpose here is to check any major transactions in your account which could raise a red flag, as this could be due to a loan to meet the minimum POF. If you are showing the 6 months bank statement, the officer can very well find out any such transactions.

3- If you have had a normal transactions over the past months, you need not worry about deviations. If their indeed in a huge deposit, you will have to send necessary proofs to show the source of these funds. Your average balance need not be above minimum POF. Your net balance should be above minimum POF.

Thanks for your clear reply. Actually my transactions are normal but I have two cases with a bit big number. Once case is XXX $ transferred from Acccount_of_Person_1 to my account then after few days transferred the same amount to Account_of_Person_2 . The second case is YYY $ transferred from my account to Account_person_2 then after 15 days the same amount (YYY) returned from him to mine.

As , in both cases, the amount XXX and YYY are just come in then out, or out then in to my account. Does this kind of transaction make problem for me?

 

[StAnger]

Thanks for your clear reply. Actually my transactions are normal but I have two cases with a bit big number. Once case is XXX $ transferred from Acccount_of_Person_1 to my account then after few days transferred the same amount to Account_of_Person_2 . The second case is YYY $ transferred from my account to Account_person_2 then after 15 days the same amount (YYY) returned from him to mine.

As , in both cases, the amount XXX and YYY are just come in then out, or out then in to my account. Does this kind of transaction make problem for me?

How big are the transactions? If these were just check in and out funds, I don't think this will make any difference. But if these funds are still residing in your account, better have a letter in place to explain the source.

 

[anaskw]

How big are the transactions? If these were just check in and out funds, I don't think this will make any difference. But if these funds are still residing in your account, better have a letter in place to explain the source.

No they don't reside. As I explained one amount came in to mine then out, another case was an amount came out from mine then returned back in.

 

[anaskw]

Thank you for prompt reply.
1- why do I need for a current balance certificate, if the bank statement already shows the current balance. Note that the statement will be print on the bank letterhead (black and white only) and stamped (not signed).
2- sorry, I didn't get you here. Should I calculate the average by myself, and was my calculation method correct?

Any idea on these?

 

[StAnger]

Thank you for prompt reply.
1- why do I need for a current balance certificate, if the bank statement already shows the current balance. Note that the statement will be print on the bank letterhead (black and white only) and stamped (not signed).
2- sorry, I didn't get you here. Should I calculate the average by myself, and was my calculation method correct?

- We cannot pick and chose on the requirements of CIC. They are strict and precise on what they want. So get everything they have outlined.

- Ask your banker and he/she will compute the average balance and put in on the bank certificate.

Here is a top tip, when you go to your bank, carry CIC guidelines and ask them to give all the documents exactly as required by CIC. Tell them how important this is for you and that CIC is very strict on their document requirements. Do not just compromise on what bank gives you, they are usually lethargic to do extra bit of work but you can always ask them for these documents. Its your right as their customer. Good luck.

 

[anaskw]

- We cannot pick and chose on the requirements of CIC. They are strict and precise on what they want. So get everything they have outlined.

- Ask your banker and he/she will compute the average balance and put in on the bank certificate.

Here is a top tip, when you go to your bank, carry CIC guidelines and ask them to give all the documents exactly as required by CIC. Tell them how important this is for you and that CIC is very strict on their document requirements. Do not just compromise on what bank gives you, they are usually lethargic to do extra bit of work but you can always ask them for these documents. Its your right as their customer. Good luck.

I will do that, though I asked then already and they said they don't provide average balance. This concept is not used in my country. They use only current balance or balance at each transaction.
In best scenarios, I think I could bring my own calculation with me to my bank and ask him to stamp my letter (but it would be in a bank letterhead) . Note in all cases I will have definitely stamped bank statement of 6 months on bank letterhead. I will ask for current balance certificate (no headache on this). Do you think it's fine with these?

 

[StAnger]

I will do that, though I asked then already and they said they don't provide average balance. This concept is not used in my country. They use only current balance or balance at each transaction.
In best scenarios, I think I could bring my own calculation with me to my bank and ask him to stamp my letter (but it would be in a bank letterhead) . Note in all cases I will have definitely stamped bank statement of 6 months on bank letterhead. I will ask for current balance certificate (no headache on this). Do you think it's fine with these?

Well try your best, if not that do what you are planning for and it should work fine. 6 months statement should do the deal.

 

[Asivad Anac]

Hello guys,,,

What I understand from proof of funds that we need to submit a bank statement for a period of 6 months at where the current balance must be more than the required funds and average balance almost close to the required funds too.

I need your help to clear these doubts:
1- my bank doesn't provide average balance. What to do? Should I submit 6 month statement, and submit a letter of my calculation for average balance.

2- If it's not required to do average balance calculation by myself and it is only required to submit 6 month bank statement, then it's great. Otherwise, let's me know if my way of calculation whether correct or not. To calculate 6 month average balance I need to sum balances over 180 days then divide the amount on 180. And for period there is no transaction I can say for example at day Dec1 the balance was 1000$ (let's say) and it keeps constant till Dec15, so I would say the balances from Dec1 to 15 is 15K, and go on till calculating the same for 6 months.

Submit 6 months of bank statement counting back from the time you submit your post ITA application. You don't have to calculate the average balance at your end. All CIC wants to confirm is whether you have availed a loan for POF purposes. Explain any unreasonably large credit transactions (say 2000 CAD or higher) within the last 6 months.

3- If there was a difference between current balance and average balance, how much is it acceptable?

Any deviation up to 20-25% is reasonable.

4- I heard LOE (Letter Of Explanation), is there any form or format to it, or is it just any normal letter to explain some situation on my application/case?

No specific format.

Thank you
Anas