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Key Takeaways: Are you an NRI looking for a safe and attractive investment avenue that provides assured returns with minimum tax burden? Consider parking your money in NRE Fixed Deposits. Here’s a look at the interest rates being offered on such FD accounts.
NRIs often use Non-Resident External (NRE) accounts to transfer a portion of their foreign earnings to India and maintain it in Indian rupees.
To earn an interest higher than conventional savings accounts on that money, NRIs can easily open an NRE fixed deposit (FD).
An NRE fixed deposit is essentially a term deposit that offers tax-free returns on money that is earned overseas. Moreover, both the principal amount and interest earned are freely repatriable to the NRI’s country of residence.
Benefits of NRE Fixed Deposits
Besides being tax-free, a big benefit of NRE FDs is that the interest rates offered on these deposits are usually higher than the interest rates available to NRE savings account holders.
The returns on NRE FDs are assured and pre-determined, if left undisturbed till maturity, unlike investments in say the equity markets, which are unpredictable.
How to invest in NRE fixed deposits?
All leading banks in India provide the facility of opening NRE accounts and booking NRE FDs. Many of these banks also allow for remote opening of these accounts from the comfort of your home, by allowing you to book an FD online. Any individual who is an NRI as defined by the law and holds an NRE account in India can open an NRE FD account.
How are NRE FD rates calculated?
NRE fixed deposit interest rates vary from bank to bank. They may also change depending on a variety of factors like the amount and tenure of the deposit.
Also, remember that the interest rates are subject to change. So, it is advisable to check the latest rates as mentioned on the banks’ websites.
What are the current NRE FD rates?
Click here to view the FD rates for DBS Treasures.
Premature withdrawal of NRE fixed deposits
It is important to note that premature withdrawal of NRE fixed deposits is allowed either on a written request from account holders or can also be done online, with a penalty that varies from one bank to another bank.
Usually banks levy pre-closure charges of 1% applicable on all term deposits.
However, NRI investors should remember that no interest is usually paid in case NRE deposits are withdrawn before the expiry of the minimum 1-year period from the date of deposit.
Final Note: Tax-free interest makes NRE FDs an attractive option for NRIs who are looking to diversify their investment portfolio with safer avenues, all while keeping their deposits highly liquid and freely repatriable.
Get fully repatriable, tax-free returns with your NRE Fixed Deposit from Asia’s Safest Bank. Apply now!
Disclaimer: This article is for information only. We recommend you get in touch with your income tax advisor or CA for expert advice.