Many Non-Resident Indians (NRIs) open NRE fixed deposit accounts in the country to manage their savings. Similar to regular term deposit accounts, NRE fixed deposit accounts offer NRIs good returns, easy repatriation of funds, and much more; and the interest earned on the deposited amount is also exempt from income tax in India.
NRE accounts are a type of NRI bank account where money earned in a foreign country can be deposited as foreign currency. The amount is converted into Indian rupees but can also be repatriated with ease. The NRE Deposit account comes with flexible tenure options, the minimum being for 1 year. The NRE fixed deposit rates however may vary depending on the tenure chosen.
What is an NRE Fixed Deposit Account?
Fixed deposits (FDs) are considered to be the safest investment avenue, not only by Indians but by NRIs as well. One of the most popular ways for NRIs to maintain an FD in India is by opening an NRE fixed deposit bank account. A Non-Resident External (NRE) account is a rupee-dominated account can be used by the NRI to deposit the income they earn from foreign sources and maintain it in the form of an FD. An NRE fixed deposit account offers high liquidity, easy repatriation of money, and is tax-free in India. However, NRIs can only make deposits using overseas income in NRE fixed deposit accounts, which is converted into and maintained in rupees (INR).
How NRE Fixed Deposit Rates Work
FD rates or fixed deposit rates refer to the interest rate financial institutions offer to their customers. As an NRE FD is a term deposit account, the account holder can deposit a predetermined amount of money for a particular time period (minimum 1 year), on which they earn interest. Not controlled by central authorities, NRE FD rates are generally higher as compared to other types of NRI bank accounts and offer customers great liquidity. At the time of maturity, the principal amount as well as the interest earned on it is returned to the account holder, or automatically renewed.
NRE fixed deposit rates not only vary from bank to bank, but also depend on the tenure chosen, amount deposited, etc. NRE FDs are counted amongst the safest way to invest and the principal amount, as well as the interest earned on it are exempt from income tax. While the NRI is only allowed to deposit money that they have earned from foreign sources, the deposited amount is converted and maintained in Indian rupees. The money (principal amount as well as the interest earned) can be withdrawn with ease in INR or can be repatriated to the NRIs country of residence with ease.
The accountholder can also avail a loan against their NRE fixed deposit to meet any immediate financial needs as well.
The offered rates for an NRE fixed deposit account are also subject to change at any time at the bank’s discretion, so it is always a good idea to check the latest rates before opening this type of NRI bank account.
Benefits of Opening an NRE Fixed Deposit
- Easily check the rates and open an NRE fixed deposit online from anywhere.
- NRE FD deposits are free from taxes in India.
- Both the capital and interest amount can easily be repatriated to the accountholder’s home country.
- The interest rates offered on NRE FDs are higher than those offered on conventional NRI savings accounts.
- Customers have the option to select from flexible tenure options ranging from 1 to 10 years.
- The principal and interest earned can be automatically renewed on maturity.
- NRE FDs are an excellent and safe choice for depositing and saving money earned overseas, as they are free from market fluctuations.
- NRE FDs can be used as collateral or security to get a loan for meeting your immediate expenses.
- NRE FDs can also be opened jointly with another NRI or PIO or an Indian citizen who is a close relative.
Eligibility
- The accountholder must be a Non-Resident Indian (NRI) or a Person of Indian Origin (PIO)
- They should hold an NRE account.
- The accountholder must have a passport that includes their name, address, date of birth, photograph, and signature.
- The accountholder must produce necessary documents including their work permit, permanent resident or employment or student visa, resident permit, as well as any additional documents asked for by the bank.
Finding the Best NRE Fixed Deposit Rates
The main purpose of opening an NRI FD bank account is to find a safe and easy to use investment avenue that not only keeps the foreign earnings of NRIs safe, but also offers lucrative returns on the principal amount. In order to ensure that your hard-earned money is in safe hands, a little research becomes necessary. As mentioned, the interest rates offered on NRE FDs will vary with the bank you choose, the tenure, principal amount, etc., so real-time research of the latest NRE fixed deposit rates is crucial, so you can find the bank where you will get the maximum returns.
Apart from this, you need to check the terms and conditions, maturity guidelines, features of the account, online availability of services, promptness of their support team, and the conditions for premature closure of the account before choosing to open your NRE FD account.
IndusInd Bank offers NRIs and PIOs NRE fixed deposit accounts that are Indian rupee dominated, tax-free in India, and easily repatriable to their country of residence. These accounts come with the benefit of high returns and can be used not only to save the income NRIs earn from foreign sources but also to earn interest on these savings. With a minimum 1-year and maximum 10-year tenure, IndusInd offers competitive interest rates that are compounded quarterly on NRE FD accounts, making them one of the most popular NRI bank account options in India today.
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