What Counts as Settlement Funds and What Does Not

She sits at the kitchen table with a bank app open on the laptop and a legal pad beside it, working through everything the household owns and sorting it into two columns. Retirement annuity — she pauses, then writes it in the maybe column. The rental property’s equity — that one feels obvious until she isn’t sure. A personal loan she was considering, just to pad the number — she almost writes it in the yes column before catching herself.

This is the actual work of proving settlement funds: deciding what counts as settlement funds and what does not, asset by asset, against a rule most people have never had to apply before.

The core test

IRCC’s rule is simpler than the sorting exercise makes it feel: the money has to be genuinely accessible to you, both when you apply and again when a visa is issued. Not theoretically valuable. Not on its way to being liquid eventually. Accessible, now and later.

Retirement annuity money — usually a no, for two separate reasons

For South African applicants specifically, an RA is often the asset people reach for first, and it’s frequently the wrong one. IRCC’s test alone would exclude money you can’t actually get your hands on — and separately, South Africa’s own rules add a second, independent barrier: since 1 March 2021, a member can generally only access retirement annuity benefits early on the basis of emigration once they’ve been a non-resident for South African tax purposes for a continuous three years, with the clock starting from the date tax residency actually ends. Stack those two rules together and an RA is often illiquid on both sides of the transaction at once — a specifically South African complication rather than a generic one.

Property equity — a no

The rule here is blunt: property equity does not count as funds, regardless of how much of the mortgage is paid off or how quickly the property could theoretically sell. Equity isn’t cash you can show as available; it’s value tied up in an asset.

Liquid, unencumbered savings — the clean yes

The plainest version of an acceptable asset is money sitting in an account that isn’t pledged against anything or owed to anyone, and that you could actually draw on today. This is the category officers are actually testing for, and it’s why bank balances and similar accessible savings do the heavy lifting in most applications.

Borrowed money — a no

Taking out a loan specifically to inflate your settlement funds figure isn’t allowed, and it defeats the purpose of the requirement in the first place — the rule exists to confirm you can support yourself without relying on debt the moment you land, rather than to check whether you can produce a number.

Investments — depends entirely on accessibility

Our research doesn’t give us a specific, confirmed list of which investment products officers will and won’t accept, and we’re not going to invent one. What the underlying test tells you is the shape of the answer: an investment you could genuinely convert and access sits closer to the “yes” column; one that’s locked in, restricted, or contingent on some future event sits closer to “no.” Check the specific product against the accessibility test, not against a category label.

Sort your own list against the accessibility test before you sort it by what feels like it should count — and if it’s still unclear, Cape2Canada’s free guides are there to read through properly rather than guess.