Non-resident Indians (NRIs) could benefit from these Fixed Deposits (FDs) as they offer competitive interest rates, tax exemptions, and secure returns, helping individuals grow their
Get up to 9.40% p.a. interest, inclusive of additional benefit of 0.50% p.a. for senior citizens and 0.10% p.a. for women
NRI FDs are specially designed for Indians living abroad who wish to grow their savings in India. These deposits offer flexible tenures and come with a wide selection of features that cater to an NRI investor's financial needs. NRIs can choose between Non-resident External (NRE), Non-resident Ordinary (NRO), and Foreign Currency Non-resident (FCNR) accounts based on their financial suitability.
The interest rates for NRI FDs can vary based on the bank or NBFC, tenure, and amount deposited.
1. NRO FD Interest Rates
Banks |
Tenure |
Interest Rates (% p.a.) |
SBI |
7 days – 10 years |
3.50% - 7.10% |
HDFC Bank |
7 days – 10 years |
3.00% - 7.40% |
Axis Bank |
7 days – 10 years |
3.00% - 7.10% |
Note: The interest rates mentioned here are applicable to deposits under ₹3 Crores. They are subject to change at the discretion of the bank.
2. NRE FD Interest Rates
Banks |
Tenure |
Interest Rates (% p.a.) |
Bajaj Finance |
1 year – 3 years |
7.40% - 8.35% |
SBI |
1 year – 10 years |
6.50% - 7.25% |
HDFC Bank |
1 year – 10 years |
6.60% - 7.40% |
Axis Bank |
1 year – 10 years |
6.70% - 7.10% |
Note: The interest rates mentioned here are for deposits under ₹5 Crores. They are subject to change at the discretion of the bank or NBFC.
3. FCNR FD Interest Rates
Banks |
Tenure |
Interest Rates (% p.a.) |
SBI |
1 year - 5 years |
3.90% - 5.70% |
Note: The interest rates mentioned are subject to change at the discretion of the financial institution.
Features and Benefits of NRI Fixed Deposit
NRI Fixed Deposits offer several features and benefits that make them an attractive investment option for NRIs:
Easy Renewal
NRIs can easily renew their FDs upon maturity, often with the option of auto-renewal. This process allows for continuous growth of investments without the need for manual intervention.
Safety and Credibility
FDs issued by banks in India are considered a low-risk investment due to their stability and the FD insurance coverage provided to depositors. They are ideal for NRIs who want to safeguard their earnin Read Moregs against stock market fluctuations and maintain a stable investment. Read Less
Senior Citizen Benefits
Some banks offer higher interest rates for senior citizen NRIs, providing an added advantage for those above 60 years.
Choice of Currencies
NRI fixed deposits can be held in various currencies, such as INR, USD, EUR, and GBP, through Foreign Currency Non-resident (FCNR) fixed deposits. This flexibility allows NRIs to invest in their prefer Read Morered currency without worrying about exchange rate fluctuations. Read Less
Easy Repatriation
Funds in NRE FDs are fully repatriable, meaning both the principal and interest earned can be transferred back to the NRI’s country of residence without any restrictions.
Tax Benefits
Interest earned on NRE fixed deposits is tax-free in India, making it a tax-efficient investment option for NRIs. However, interest earned on NRO FDs is subject to Tax Deducted at Source (TDS) of 30%.
Diversification of Investment Portfolio
By investing in NRI FDs, NRIs can diversify their portfolios and reduce overall investment risk. This ensures a balanced approach to wealth accumulation.
Depending on their financial needs and income sources, NRIs can choose from the following types of fixed deposits in India:
1. Non-resident External (NRE) Account
NRIs looking to invest their foreign earnings in Indian FDs need to open an NRE account. The interest earned on NRE FDs is tax-free in India, and both the interest and principal can be fully repatriated. This makes NRE FDs a suitable option for NRIs planning to eventually return to India.
2. Non-resident Ordinary (NRO) Account
NRIs can use an NRO account to invest income earned from sources within India, such as rent or dividends, into fixed deposits. The interest earned on these NRO FDs is subject to taxes in India, and the funds can be repatriated, though only up to a specified limit.
3. Foreign Currency Non-resident (FCNR) Account
An FCNR account allows NRIs to hold fixed deposits in foreign currencies, protecting their investments from exchange rate fluctuations. The interest earned on these FDs is tax-free in India, and both the principal and interest amounts are fully repatriable.
To open an NRI FD, applicants must meet certain eligibility criteria. While these may vary across banks and NBFCs, here are some common parameters:
The applicant must be a Non-Resident Indian (NRI), Person of Indian Origin (PIO), or Overseas Citizen of India (OCI)
A valid NRE, NRO, or FCNR account with an Indian bank is required
A valid passport and visa must be provided
Proof of address outside India is necessary, such a utility bill, bank statement, or rental agreement
Aside from the eligibility requirements, NRIs may have to keep the following documents handy:
Recent passport-sized photographs are required
The NRI FD application form must be completed
Opening an NRI FD account is a straightforward process. Here’s what you need to do:
Start by selecting a bank or NBFC that offers favourable NRI FD rates and features that suit your needs
Fill out the NRI FD application form on the financial institution’s website or at any branch
Submit necessary documents such as your passport, visa, proof of overseas residence, and a recent photograph
Deposit the desired amount into your NRE, NRO, or FCNR account to fund the FD
Select the type of FD, the amount, and the tenure
Once chosen, you can start your investment and begin earning returns.
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Frequently Asked Questions
Can NRIs avoid paying double tax?
Yes, NRIs can avoid paying double tax under the Double Taxation Avoidance Agreement (DTAA) that India has with several countries. To benefit from DTAA, NRIs need to provide tax residency certificates and other required documentation to the relevant tax authorities.
Is PAN mandatory for an NRI Account?
Yes, having a Permanent Account Number (PAN) is mandatory for opening an NRI account in India.
Is TDS applicable on NRI FD?
Yes, TDS is applicable on NRO FDs but not on NRE and FCNR FDs.
What is the acceptable mode of payment for NRI FD?
NRIs can fund their FDs through direct remittance while abroad, transfers from NRE/NRO accounts, or using foreign currency earnings.
Can NRIs take a loan against FD?
Yes, NRIs can avail of loans against their FDs, subject to the bank’s terms and conditions.
Does tax deducted at source (TDS) apply to NRI FD?
Yes, TDS applies to NRO FDs, but NRE and FCNR FDs are exempt from TDS.
Can I have a nominee for my NRI fixed deposit?
Yes, NRIs can nominate a person for their fixed deposits.
Are the interest rates for NRI Fixed Deposits higher than regular fixed deposits?
Interest rates for NRI FDs can be higher or similar to regular FDs, depending on the bank or NBFC and the type of deposit.
Can I manage my NRI Fixed Deposit account online?
Yes, most banks offer online facilities to manage NRI FD accounts.
What happens if the NRI returns to India permanently?
If an NRI returns to India permanently, their NRI FD may be converted to a resident FD. The bank or NBFC should be informed of the change in residency status, and the interest rates and tax treatments will be adjusted according to resident deposit rules in India.
Are there any special considerations for tax under Double Taxation Avoidance Agreements (DTAA)?
Yes, under DTAA, NRIs may be eligible for reduced tax rates on interest earned.
What should I do if I have further questions about my NRI Fixed Deposit?
Contact your bank or NBFC’s customer service for detailed information and support regarding NRI fixed deposits.
Can NRI keep FD in India?
Yes, NRIs can maintain FDs in India through NRE, NRO, and FCNR accounts.
How to avoid TDS on FD for NRI?
To avoid TDS on NRI FDs, you could invest in NRE or FCNR accounts, as these are exempt from TDS.
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