A Non Resident Indian or NRI is any individual who lives out of India for more than 183 days in a calendar year. Such individuals have different banking needs as compared to resident Indians. For this purpose, banks provide NRI bank accounts. The most common types of these accounts are NRE, NRO, FCNR and RFC accounts. Account holders can also create fixed deposits out of the sums parked in their NRE and NRO accounts. This article is about NRE fixed deposits – what it is, what the eligibility criteria to open one is, and the benefits of this FD.
What is an NRE deposit?
In order to understand the term NRE deposits, you must first understand what an NRE account is.
NRE is an abbreviation for Non Resident External Rupee. An NRE account is a special type of account in which Non Resident Indians can park their foreign currency earnings. However, the foreign currency parked is first converted into INR amount, as per the applicable currency conversion rate.
The sums deposited into the NRE bank account can be used to create a fixed deposit, which is regarded as NRE fixed deposit. Despite the fact that sums are deposited in foreign currency and converted into INR, interest rates and tenures associated with this FD differ considerably from domestic fixed deposits.
Eligibility criteria to open NRE deposits
In order to open an NRE FD, you need to fall in the below mentioned eligibility criteria:
Benefits of opening an NRE deposit
There are several advantages of NRE fixed deposits. They are as under
Repatriability: The principal amount deposited and the interest earned on it is freely and repatriable. However, the repatriability clause applies only to your (foreign) country of residence.
Taxation: You do not have to worry about paying any taxes on the fixed deposit in India. As per Income Tax laws and the Double Taxation Avoidance Agreement (DTAA) between India and several different foreign countries, you do not have to pay any taxes on the principal amount deposited as well as the interest earned on it.
High-Interest Rate: You can earn high interest rates on the sums parked in the fixed deposit as compared to domestic FDs
Joint FD with nomination facility: This NRI fixed deposit can be opened jointly. However, the joint holder has to be another NRI or more than 1 NRIs. Also, you can assign a nominee for the fixed deposit.
Flexible deposit tenures: The term of deposit is quite flexible. FDs can be opened for a minimum tenure of 1 year and a maximum duration of 10 years at a time, after which, you can renew it again. You may withdraw your FD prematurely before the FD term as well. However, you need to check the terms of premature withdrawals and the penalties levied by your bank.
Final word: An NRE account FD is a good option for you if you are living and earning in a country where the value of the currency is higher than INR. This way, you can benefit from the conversion rate and create savings at a faster rate.
Featured businesses list is created by admin on as per the request of business owners when adding their business and must add all information like logo, social link and description
Pet Health™ and Lifetime Care Center has its primary focus on the individualized pet care. The veterinary care we provide in Las Vegas always...
TradeBizz Research India is s most trustworthy intraday stock tips provider and this in go round have helped us to serve a vast trading company....
Vinyasa Yoga School India Certified Yoga Alliance USA offering 100, 200, 300, 500 hour hatha, Ashtanga, Vinyasa yoga Teacher Training courses in...
" Golden Web Solution is a pioneer web development company Kolkata, India. We are one of the fast growing website development companies."
Packers And Movers Bangalore Local Household Shifting Service, Get Free Best Price Quotes Local Packers and Movers in Bangalore List , Compare...
The Next Agency helps you beat back new competitors like Benefits, Namely and Gusto.
With the rising popularity of Android Application development, Afixi have added a team of professionals who are experts in providing custom...
The best service providers in your city and provide the quality service while shifting your households, office equipment and cars all over India....