A Definitive Guide To NRE Fixed Deposits

Regular investment is a healthy financial habit. But many Non-Resident Indians refrain from doing so. They are hesitant because they lack market knowledge. They might also be unaware of the stock market scene overseas. In such cases, they should opt for a non-resident Indian or NRI Fixed Deposit.

It serves as an excellent investment channel to global Indians. It allows them to deposit the income earned abroad safely. It also helps them expand their investment substantially. This way, they have backup financial aid at their disposal. Such types of FD Accounts come in three types. They are as follows:

• Non-Resident External (NRE) Fixed Deposit Account
• Non-Resident Ordinary (NRO) Fixed Deposit Account
• Foreign Currency Non-Resident (FCNR) Fixed Deposit Account

Of them, NRE Fixed Deposits are the most preferred type. This is because it is exempt from taxes. This way, it enables the NRI to retain their investment easily. The following aspects help you gain a better understanding:

Repatriation

An NRE FD Account offers complete repatriation. This means you can withdraw the principal amount and the interest earned.

Interest rates

Compared to other NRI FDs, this FD offers relatively high interest rates. This way, you get a better chance at building your investment.

Fund source

An NRE FD converts the deposited income earned overseas into Indian Rupee. It also maintains the funds in the same manner.

Processing time

You need not wait for a lengthy time to open your NRE Fixed Deposit Account. Nowadays, people prefer the online option. It is more convenient that way. However, you could visit the nearest branch and open it as well. Either way, you must submit the following documents:

• A valid Indian passport
• Permanent Account Number (PAN) Card or Form 60
• Proof of address (of both India and overseas) as per Customer Identification Policy
• Proof of NRI or Person of Indian Origin (PIO) status
• Recent passport size photographs

While these are the basics, your bank may ask you for other documents for further verification.

Tenure

The tenure ranges between a year to 10 years. However, you may extend it upon maturation. The process for the same varies from bank to bank.

Joint Account facility

An NRI can hold the NRE FDs with another individual. However, if the other holder is an Indian resident, they should comply with specific guidelines. For instance, they should be the primary account holder's close relative or family member. Also, the operations in such accounts are ‘Survivor or Former’ only. In other cases, the joint holder is an NRI. They must have valid proof to justify their NRI status too.