Rising interest rates in India offer a valuable opportunity for Non-Resident Indians (NRIs) to invest in Fixed Deposits in their home country. At present, with the Reserve Bank increasing policy rates to tame spiralling inflation, the deposit rates offered by banks are likely to get more attractive. Also, thanks to the fall in Indian Rupee (INR), it allows you, as an NRI, to capitalise on the opportunity.
NRI Deposits are a safe and secure way to build wealth (if you take care to choose a bank with robust financial health). Here are four key benefits of investing in a Fixed Deposit (FD):
When capital markets are very volatile, it makes sense to allocate a portion of your investible surplus or portfolio to an FD.
Some popular fixed deposits for NRIs are:
1. Foreign Currency Non-Resident (FCNR) Deposit:
FCNR Deposit can be opened only in a freely convertible foreign currency. You have a choice of six currencies: US Dollar (USD), Great Britain Pound (GBP), Euro (EUR), Japanese Yen (JPY), Australian Dollar (AUD), and Canadian Dollar (CAD) to book an FCNR Deposit. Key features include:
To know more about the FCNR Deposit, click here.
2. NRE Rupee Deposit
As the name suggests, this deposit is rupee-denominated. Funds from the NRO Account cannot be used to create NRE Rupee Deposit. You can fund the NRE Rupee Deposit with any convertible currency received from abroad. Axis Bank offers a competitive exchange rate while converting foreign currency to INR to open an NRE Rupee Deposit. Its features include:
To know more about the NRE Deposit, click here.
3. NRO Rupee Deposit
The NRO Rupee Deposit comes with a tenure of 7 days to 10 years. Based on the tenure you select, considering the financial goal you are addressing, and liquidity needs, the interest rate offered on NRO Rupee Deposits is competitive. Other features include:
To know more about the NRO Rupee Deposit, click here.
4. NRI-Pro Rupee Deposit
The NRI-Pro Rupee Deposit offers an attractive interest rate. It is possible to earn a higher INR yield by locking in the conversion rate. Its major features include:
To know more about the NRI Pro-Rupee Deposit, click here.
5. Recurring Deposits
Other than the above, if you are looking at investing regularly in a recurring deposit in a piecemeal manner and not a lump sum, then you have the option to NRE Recurring Deposit and/or NRO Recurring Deposit. In these, you can deposit a minimum monthly instalment of Rs. 1,000 and in multiples of Rs. 500 thereafter. As regards their repatriation rules and taxation is concerned, they are the same as discussed above for NRE Rupee Deposit and NRO Rupee Deposit.
A variety of options are available for you, an NRI, to park money in fixed deposits. All you need to do is make a wise choice considering your liquidity needs, the financial goal/s you want to address, the time horizon, and take cognisance of the repatriation and tax rules. A sensible approach to investing in bank FD can result in a rewarding experience. Book your NRI Deposit with Axis Bank today!
Disclaimer: This article has been authored by PersonalFN, a Mumbai-based Financial Planning and Mutual Fund research firm. Axis Bank doesn't influence any views of the author in any way. Axis Bank & PersonalFN shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.