As a Non-Resident Indian (NRI), you can earn guaranteed returns while parking your foreign or Indian earnings in the right FD account. Find out more about NRI FD in this post.
An NRI fixed deposit account is an investment option designed for Indians residing overseas. It is one of the most secure investment means for NRIs in comparison to other investment instruments. It comes with guaranteed returns and privileges like tax-free earnings in certain cases. NRI FD accounts can be held by;
- PIO – Person of Indian Origin
- NRI – Non-Resident Indian
- OCI Cardholder – Overseas Citizenship of India cardholder
Benefits of NRI FD Account
- A safe and secure investment option in India for NRIs
- An ideal way to invest your foreign income or Indian-generated income while you’re away and generate higher returns than savings accounts
- Low deposit amount and flexible fund options
- Non-taxable earnings on certain NRI FD accounts
- Overdraft facility of up to 90% on deposits offered by various banks
- Hassle-free renewal and quick processing
Types of NRI Fixed Deposit Account
- NRE FD: NRE Fixed Deposit is for your investing your foreign earnings into Indian currency. The rupee-denominated account exchanges the currency of your resident country and converts it into INR currency. This account offers full repatriability, and the interest-earned attracts no tax liability in India.
- NRO FD: This is for depositing your earnings generated within the country while you are away. Again a rupee-denominated account, the interest earned is taxable in India as per the Income Tax Act, 1961. While the interest earned is freely repatriable, there are certain limitations on the repatriation of the principal amount.
- FCNR FD: Foreign Currency Non-Resident (FCNR) FD allows NRIs to open a fixed deposit account in any of the nine foreign currencies such as USD, GBP, HKD, AUD, CAD, and more.
- RFC FD: Resident Foreign Currency fixed deposit is designed for Non-resident Indians who are returning to India but wish to park their foreign currencies safely without getting it exchanged. If and when they regain NRI status, the FD can be converted into NRE FD.
Opening an NRI FD Account?
Opening an NRI FD account is pretty easy and can be done from overseas. You can either apply online or submit these below-mentioned documents along with an application form in person to the partner branch of your preferred bank to open the account.
- A valid copy of attested passport and visa
- A valid copy of Indian PAN Card/ Form 60/ PIO or OCI Card.
- Recent passport size photo
- Proof of foreign residence
- FEMA declaration along with current work contract and a copy of CDC (Only for Seafarers)
- Any other document as required by the bank
Along with these documents, you will also need to submit the documents for funding your account. These can be in the form of:
- Inward remittance
- Cheque
- Demand drafts
The NRI FD accounts can be held individually or jointly with another NRI or resident Indian as well, depending on the type of deposit account you choose.
Unlike some other types of investments, NRI FDs come across as a secure medium with assured returns. With an NRI FD account, your principal will grow steadily while also offering you interest income. It is essential to choose the right type of deposit account based on your present and future needs. For instance, if you wish to hold your deposits in INR but invest in foreign currency, an NRE account would be the right option. Look for a credible bank that can offer you attractive interest rates while opening an NRI FD account.