When people move overseas, they may still want to sustain their Fixed Deposits. But a regular one will no longer suffice their needs. This is where a non-resident Indian Fixed Deposit Account comes into the picture. It is a Deposit Account specifically meant for global Indians. An NRI Fixed Deposit serves as a safe investment option. It allows NRIs to deposit the income earned overseas quickly.
It also lets them make steady earnings through their deposits. This way, they need not seek other investment options that they are unsure of. Also, such accounts are of three kinds. Each meets a specific financial need. Thus, to reap the benefits of your FD Account, know about them in detail:
Non-Resident External (NRE) Fixed Deposit Account
If you are an NRI earning in foreign currency, opt for an NRE Fixed Deposits. It automatically converts your deposits into Indian Rupees. Plus, it maintains your investment in INR for the deposit duration. Such FD Accounts also offer full repatriation. This means you may withdraw the principal amount and the interest earned. Moreover, the interest earned on your deposit is exempt from taxes.
Non-Resident Ordinary (NRO) Fixed Deposit Account
An NRO Fixed Deposit is ideal for those who earn income from India. If you move to the US and in your absence, you have put your house on rent. Now, the rent is the income you earn from India. This type of NRI FD enables joint holdings. So, open it with an Indian resident or another NRI.
Foreign Currency Non-Resident (FCNR) Deposit Account
The third type is an FCNR Deposit Account. It lets you deposit funds in freely convertible currencies accepted worldwide. Hence, it is suitable for individuals who keep moving overseas for work. An FCNR FD also holds other benefits. For instance, it lets you maintain the deposited amount in the original foreign currency. The following are the currencies accepted under this NRI Fixed Deposit Account:
- US Dollar (USD)
- Australian Dollar (AUD)
- Great Britain Pound (GBP)
- Canadian Dollar (CAD)
- Japanese Yen (JPY)
- Hong Kong Dollar (HKD)
- Singapore Dollar (SGD)
The minimum and maximum deposits of these currencies depend on your bank.
Before you open NRI Fixed Deposit Account, remember the following things:
- Taxation
Always consider the taxation policy of an NRI FD Account. It plays a significant role in your total investment.
- Financial goals
Be sure of your financial goals before you start investing. This includes both short and long-termed ones.
- Duration
Each type of FD has a minimum and maximum duration. For instance, the minimum duration of an NRE FD is a year. So, be mindful of this when you select one.
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