If you are an NRI who prefers to invest his money in a fixed deposit in India, this article is absolutely for you.
Moreover, with rise in dollar value over the last few years, it would not be wrong to say that interest rates are at peak in the country. Hence, it is a right time for you to invest in a fixed deposit here. So, if you are also an NRI, and don't know about the best options available to invest in fixed deposits, read this article further.
NRE Fixed Deposits
You can invest your overseas savings in NRE Fixed Deposits in India. NRE is basically a Rupee denominated deposits that can provide you great returns along with the liquidity. In addition to this, no tax deduction will be there on your earned income for such deposits. Yes, the principal amount and the earned interest, both are fully repatriable. More to the point, usually the tenure for such deposits ranges between 1-5 years. You can easily open NRE fixed deposit via:
- Funds remitted from abroad with the help of official banking channels.
- Through traveller cheque or foreign currency tenders.
- Transfer of existing NRE bank account.
NRO Fixed Deposits
When it comes to an NRO Fixed deposit then it is also an ideal channel to invest your money earned in India. If you have salary, rent received on property, dividends, etc, you need to consider NRO fixed deposits. The important thing here is that the interest earned on such deposit is repatriable in fact taxable. Whereas, the repatriability of the principal amount has certain terms and conditions. You can invest in NRO Fixed Deposit through:
- Depositing your earnings in India in an NRO deposit.
- Through remitting the funds from abroad via banking channels, and using it for the NRO deposit.
- Transferring existing NRE, NRO OR FCNR accounts funds, and utilizing it for NRO deposit.
FCNR Deposit is denominated in selected foreign currencies. Usually these types of deposits eliminate the risk of unfavourable movements in the foreign exchange rate, lies between the time of repatriation and investment. Whereas, the interest on these deposits is not taxable in India, and is generally earned in the currency of deposit. Here, both the principal and interest are completely repatriable.
There is no denying on the fact that fixed deposits are definitely the integral for every investor. Yes, along with offering the safety of the principal amount, they help you in providing the liquidity along with the steady earnings. Thus, it would be advisable to invest at least a chunk of your total investment in fixed deposits. So, invest in fixed deposits, and get ready to reap maximum benefits.
(Updated on:31st October,2016)