With a staggering USD 80 billion sent home by the Indian diaspora, India has maintained its position as the top recipient of remittances worldwide. This enormous sum is frequently left idle in low-yielding savings accounts. NRIs may want to think about investing in fixed deposits, which help them earn higher returns, rather than leaving their savings in these accounts. With a fixed deposit calculator, it is simpler to decide how much to invest when you can calculate the annualised interest rate on your fixed deposit and the growth of your investments over the specified tenure.
NRI Fixed Deposits
NRI Fixed Deposit offers guaranteed returns unaffected by market fluctuations, in contrast to other investment options. As a result, you receive assured returns while your principal grows steadily and risk-free. NRI FDs are the best choice for NRIs looking for wise investment opportunities.
Fixed Deposit Account Types
A safe and reliable investment choice is a fixed deposit. One of the following choices is available when opening a fixed deposit account:
- Non-Resident External (NRE) Deposit: The deposit is made in NRE deposits, denominated in rupees. An NRE fixed deposit account has the benefit of being tax-free on both the principal and interest earned. Another benefit is the simplicity with which you can easily repatriate your money in any foreign currency. In some cases, the interest rate on NRE fixed deposits is higher than on conventional fixed deposits.
- Non-Resident Ordinary (NRO) Deposits: If you have income in India, you can open a fixed deposit account under NRO deposits and invest your Indian income. According to IT laws, the interest earned is taxable
- Foreign Currency Non-Repatriable (FCNR) Fixed Deposits: FCNR deposits let you deposit money in internationally recognised foreign currencies.
Things To Consider Before Opening A Fixed Deposit Account:
The top five things you need to know are listed below:
Interest rate on Fixed Deposits
Depending on the bank’s credit rating, various banks offer interest rates on fixed deposits. The interest rate banks offer the first thing you need to be aware of. Choose a bank that gives you a reasonable interest rate. Depending on your investment amount and tenure, the rates will change. The risk of default may be higher for the bank offering the highest interest rate. The best combination must be chosen with some level of expertise.
Repatriation of Funds
You can send money you’ve earned abroad back to the nation where you currently reside through repatriation. Repatriation from NRE deposits is unrestricted. The principal and interest amounts are typically both eligible for repatriation. NRO fixed deposit accounts only permit you to repatriate a certain amount during the financial year and require more paperwork.
As was already mentioned, tenure is one of the key factors to consider before opening a fixed deposit account. Unlike traditional FD accounts, an NRE fixed deposit account’s minimum term is one year. Typically, the bank will offer a higher interest rate the longer the tenure. However, having a long FD duration is not always a good idea. Use shorter-duration FD accounts if interest rates are predicted to rise.
In line with your financial goal
You should assess your financial objectives before opening an NRI fixed deposit account. You must determine whether your FD investment will support and advance your financial objectives. You should also know how much money to put into a fixed deposit.
Although it is last on the list, taxation is the most crucial factor to consider if you are an NRI and want to invest in India. Taxes are a major factor in calculating your net investment earnings. Depending on the type of account, NRI fixed deposits may be partially taxable in India. While NRE fixed deposit is entirely tax-exempt, the interest earned on NRO FDs is subject to taxation.
NRI Eligibility Requirements For Opening Fixed Deposits
You must give the bank the information listed below:
- Visa/Work Permit: You must show the visa documents in which your work permit is contained. In some circumstances, banks may request additional employment-related documents.
- Passport: Your name, address, DOB, and other information must be verified in your passport.
Due to its higher interest rate (compared to a regular savings account) and low risk, a fixed deposit is a type of term deposit that is a well-liked investment option in India. It’s easy to open an NRI fixed deposit, and you can do it online or in person at a bank branch. Also, taxation can be complicated for NRIs, so it’s best to consult a professional. They can take care of your taxes and offer you the best investment advice. Fixed deposits calculator can assist you with financial management by creating a monthly or quarterly pay-out plan by making a one-time investment.