What Are The Different Kinds Of NRI Fixed Deposits?

by Shashank Bhaskar Finance Adviser

As opposed to Indian residents, the banking services differ for NRIs. You can choose between an NRE or NRO or FCNR account if you want to manage your finances back in India. Moreover, you can also create fixed deposits of the sum parked in your NRI account. But an NRI fixed deposit can help you earn greater returns on your savings and considered a form haven. Now, as an NRI, you can open three kinds of FDs.

They are as follows –

NRE fixed deposits

In such an NRI FD, cash gets deposited in foreign currency which then gets converted to INR. Once you have deposited enough funds into your NRE account, you can create an FD of the same. The deposit can be created online as well as visiting the branch. The tenure and interest rates on domestic FDs are different than those of NRE savings FDs, and you can earn a higher interest rate on these deposits. Also, no charges get levied on this FD and are entirely repatriable.

NRO fixed deposits

An NRO account is a rupee account and ideal for NRIs who have income sources and investments in India. The savings parked here gets converted to fixed deposits. Usually, the bank offers the same NRI fixed deposit interest rates as applicable on the domestic FDs. Also, both the principal amount and interests earned on such FDs is subject to TDS and other applicable taxes.

FCNR fixed deposits

It is essentially a deposit and not an account. The FCNR FD should be opened separately unlike NRE or NRO account. This deposit gets created out of different foreign currencies. The interest payout also gets done on foreign currencies, and you can open fixed deposits based on some major international currencies which include USD, GBP, EUR, JPY, AUD, CAD, NZD, SGD, SEK, DKK and SFR. The tenure of such term deposits is between one to five years. The banks offering the best interest rates are SBI Bank. DBS Treasures, HDFC Bank, and Axis Bank.

Opening any of the mentioned NRI fixed deposit is simple nowadays. You can create the FDs through your NRI bank accounts. But the minimum deposit amount and the terms and conditions for FD maintenance and premature withdrawal requires some checking. Consider opening these deposits online as well as you would be away from the bank branch. But make sure the relevant documents get attested by the Indian Embassy.