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Everything an NRI needs to know about FD

Non-Resident Indians (NRIs) looking to diversify their portfolios, keep looking for smart investment opportunities to grow their savings. As an NRI, you can always consider investing in fixed deposits offering guaranteed returns with attractive NRI interest rates.
1.      Two types of Indian Rupee Fixed Deposits:

NRE Fixed Deposit

·      Can be opened jointly with NRIs and Persons of Indian Origin (PIOs)
·      Principal along with interest are completely repatriable
·      Interest income on balances of the NRE Fixed Deposit is exempt from income tax
·      Tenor ranges from 1 to 5 years
·      The deposit is automatically renewed on maturity in the absence of any other instruction

NRO Fixed Deposit 

·      Can be opened jointly with Resident Indians. Your family in India can be a joint account holders.
·      An ideal investment option for savings and income arising out of India
·      Tenor ranges from 7 days to 5 years
·      Interest on the deposit is credited every three months or at the time of maturity

2.      Repatriation 

In NRE FDs, Principal & Interest are fully repatriable but in NRO FDs RBI allows repatriation only for i) current income ii) up to USD 1 (one) million per financial year (April-March), for any bonafide purpose after payment of applicable taxes.

3.      Minimum Deposit Amount

If it is a Fresh deposit the minimum deposit amount is INR 25,000 but if you’re adding on then the amount is INR 10,000
4.      Tax Redemption
Under the current Double Taxation Avoidance Agreement (DTAA) provisions, NRI customers will be entitled to lower withholding tax (TDS) subject to fulfillment of certain conditions.  Compared to the regular NRO Account or Fixed Deposit, with the DTAA benefit, you can now enjoy a higher yield in the concessional rate of Tax Deducted at Source (TDS) on the interest of your NRO Account or Fixed Deposit.



The information provided in this article is generic in nature and for informational purposes only. It is in no manner can act as a substitute for specific advice in your own circumstances. We Strongly recommend you to seek professional guidance pertaining to your query or doubt.

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