Well, there are lots of NRI people who feel confused about how they can also do investment in the fixed deposit or FDs in India. Also, there are lots of reasons because of which the FDs are holding one of the most favorite choices when it comes to investments in India. However, there are lots of people from this country who are living or going to live in another country for different purposes. For them, NRI or Non-Resident External aka NRE deposits also became extremely popular. Well, those who don’t know, NRE fixed deposit is same as the normal fixed deposited that is for residential people however it is the term which is mostly used with NRIs as they use NRE account in order to pen their fixed deposits. These accounts are not just virtually tax-free but also simple and easy for NRI who want to open their account.
Along with that, there are lots of things that you need to know about NRE fixed Data and how beneficial can be for the individual before that here are the features that you should know
Features of NRE Fixed Deposit:
- The money you deposit can be done using the Indian currency
- You can close the account anytime you like or open anytime you want
- Here you get flexible tenures as well as a range that starts from 1 year to the 10 years
- Also, the bank offers auto-renewal options, about the FD, renew, It happened already after your FD get mature
- You can even get the loan against the NRE deposit
- Not just that, there are some bank who even offer more than 90% overdrafts for the NRE deposits
- There are some banks that will let you open the NRE account jointly
- There are stipulations regarding the minimum deposited and maximum deposited in every bank.
What are the benefits of NRE deposit?
When you open your account in NRE deposit, there are several benefits that you get. These benefits are not just good but also help in enjoying some other facilities as well, such as:
- Well the deposit can offer nomination facility to the person who deposits
- Also, the bank is providing facilities like overdraft as well as a loan to the NRE deposit. Also, it makes sure that you have money when you need
- With the help of this you are always ready for the unforeseen situations as here you get the prematurely closing option as well
- Also, you can earn and enjoy the interest even if you are not living in the country
Rules and Regulations of NRI/NRE Fixed Deposits
There are different rules and regulations that are made in order to make the whole thing simple and easy. However, there are some basic things that you should know so you can understand the work much better and easier.
What are the eligibility criteria for those who want to open NRE fixed deposit
Well, if you are NRI and want to open your fixed deposit you should be aware with the legibility criteria and you fit in or not.
- Those who want to open their account in the fixed deposit; they have to be NRE or Nonresident India. If not then they should have their POI, also known as Person of Indian origin
- Along with that, they also going to need an NRE account as its important for the further process
What are the documents that are going to require for opening the NRE deposit?
For such work, the most basic and important part is its documentation. Right document scan help you in doing all worked easily and hassle-free but also it can make the complete process much less time to consume and tiring. Here are the documents that you are going to need
- Your passport
- Also, submit your work visa which is valid
- Along with that, also do submit the proof related to your address
What are the differences between NRE and NRO account?
Lots of NRI which is also known as Non-Resident Indians either hold NRO or they have NRE account. Well, these options are helpful especially when it comes to investing the popular deposit options which let them earn the good amount in the rate of return as well as India’s park benefits. These both options are especially available only for the NRIs. They come under lots of different kind of benefits which mostly includes full reparability, tax exemptions etc.
- NRE: knowing more about what NRE is, it’s important to know what NRE stands for. Well NRE stands for a Nonresident external account. Well, it’s a type that you will get in the deposit account which is used when the NRI wants to make an overseas deposit but remit in an account same in India. The currency will change into the Indian currency which is rupees. Also in easy words, it’s a deposit account which is held for doing the foreign earnings
- NRO: NRO or Nonresident ordinary account which is usually open by NRI for managing their income that they got from the country India. Well, the income can include the sources like pensions, rent, as well as the other types that you can get in dividends head. However, the interest that you earned will deposit is subject for the tax.
Differences that you can get in both account: what you need to know
There are some basic differences that you can get in both accounts. Well, these differences are little but actually hold the very important part. For understating it better, here is everything that will help you in knowing better and understand easily
Both accounts have different nature toward the Indian taxation. Where NRO fixed deposit is taxable as it attracts the taxes. Well, the interest that you will get on your NRO fixed opposite will be taxed under the income tax act, 1961. Also, the percentage will be 30%. However, the percentage of taxation in NRO fixed deposit is high as compared to the percent that you get in FD tax rates in Domestic. Well on another side the taxation is applicable on NRE Fixed deposit which means there are no interest’s principals that are charged for a tax deduction. NRE is free when it comes to tax which makes this option much better than the NRO where you have to pay for the tax.
2. Joint accounts
Another difference that you can get here is the join account options. If you want to open a joint account then you should go with NRO fixed deposit as here you can do it with any citizens which hold the official certificate of being Indian. However, this option is not available in NRE fixed deposit. Here you don’t get such options even the citizen is your family or your friends. The joint account open option is only for those people who hold the account in NRO fixed deposit.
3. Deposits and withdrawal options
NRO open allows you to use the funds that are originating in the country India for opening an account. Also, you get this option in NRO as well. However, you are not allowed to do the fund transfer from the abroad when it comes to starting the fixed deposit in NRO. But you can do the transfer for opening the fixed account if you are using the NRO account. Also, you can do the withdrawals by both accounts however it should be in Indian rupees only.
Repatriation option is available on the principal investments when you are holding the account of NRO Fds. You can do the transfer only when you have earned the interest on your NRO Fds are eligible for transfer to different foreign account. However, you are getting the option in NRE FDs as here you get full repartition including the accrued interest as well as the principal to the different account or foreign account. Apart from that, it is also good especially if you are looking for earned interest on principles so you can transfer the fund to the Indian account of yours.
Well, there are different things that play an important role and also help you in understanding better about the subject. Not just it helps in that but also you can understand the rules and what you must do or don’t as well. However, there are other points too that you also have to understand in order to get the better idea about the whole thing so you can follow the rules and regulation much better.
Best NRE Fixed Deposits Interest Rates in 45 Major Banks in India.
There are various banks in India which are availing the services as well as all benefits of NRE fixed deposit. Also, here are top best major banks that you can find, such as:
- Union Bank of Indian
- Punjab National Bank
- Oriental bank of commerce
- IDBI bank
- Punjab and Sind Bank
- Andhra Bank
- Canara Bank
- Indian Overseas Bank
- UCO bank
- Allahabad Bank
- Vijaya Bank
- Syndicate Bank
- Bank of India
- Dena Bank
- Bank of Baroda
- Indian bank
- Corporation Bank
- Lakshmi Vilas Bank
- YES bank
- DCB bank
- Karur Vysya Bank
- South Indian bank
- City union bank
- Federal Bank
- Indusland Bank
- Axis Bank
- Tamilnad Mercantile Bank
- Kotak Bank
- J & K bank
- Catholic Syrian Bank
- ICICI bank
- Karnataka Bank
- Dhanalakshmi Bank
- Punjab & Maharastra Co-operative bank
- Bharat Co-operative bank
- Bassein Merchantile co-operative bank
- Thane Janata sahakari bank
- Shamrao vital co-operative bank
- Zoroastrian co-operative bank
- Abhyudaya co-operative bank
- Bombay Mercantile Co-operative Bank
What is the Interest Rate for NRE Fixed Deposit of 1 – 2 Years?
Well, there are different rates that you can get in NRE fixed deposit that you can get in 1-2 years. However, let’s take the deposit of 1 crore. If the investment is below than Rs.1 crore then the interest rate will be 6.70 %. Also if the Rs.1 crore and more than that like the amount is up to 10 crore then the interest will be 6.70%. If the amount is more than 10 crore then the rate will be 6.70%. As you can see the interest rate for the fixed depose in NRE for 1-2 years are not exceeding more in all three cases.
What is the Interest Rate for NRE Fixed Deposit of 2 – 5 Years?
In deposit of 2 – 5 years, the interest rate will be 6.75 %. Same as a deposit of 1 – 2 years, the rate will be the same if the amount is below the 1 crore, or if it’s up to 10 crores. Apart from that, the rate can be different as the choice of the bank you make. This interest is given by the SBI bank, but there are other banks too who give a different interest rate than this.
What is the Interest Rate for NRE Fixed Deposit of 5 – 10 Years?
For a deposit of 5 – 10 years, the interest rate of NRE fixed deposited is 6.85 %. The rate will be same exact below 1 crore, up to 1 crore or more than 10 crores. Again the interest rate can different as thanks can do minimize or maximization in their interest rates as per their rules.
Boosting up the investments and attracting people more into this section, NRE is doing one of the great jobs as there are lots of NRIs who want or they already invested their money. However, they should have NRE or NRO account with themselves along with the needed documents that are important for the process. Apart from that, there are different banks that are providing a different rate of interest on the tenures or the deposit to the investors. There is no doubt that being an NRI you can enjoy all different perks without facing anything, but it’s crucial to understand the basis for the smooth work.
Sudha is the senior publisher at Finance Glad. Sudha completed her education in BBA (Bachelor of Business Administration). She lives in Chennai. She is currently heading towards the banking topics. Sudha is an expert in analyzing and writing about most of the banks and credit card reviews. Sudha main hobbies and interests are reading, writing and watching the quality stuff over the internet. She usually wants to learn more productive stuff and share the best information to her readers over the internet via Finance Glad.