NRI Fixed Deposit – Things to Keep in Mind When you Apply
According to the December 2018 report issued by the Ministry of External Affairs, there are around 30,995,729 NRIs residing outside India. To help these NRIs yield attractive returns on their income and investments in India several financial institutions and NBFCs offer NRI fixed deposits. These firms and NBFCs often offer competitive NRI interest rates in India and secure greater returns.
Fixed deposits provide you with assured returns irrespective of the fluctuations in the market conditions and ensure that you do not lose your capital. However, despite the low risk associated, there are certain points that you should keep in mind while you invest in NRI fixed deposits. Some of which are discussed below.
As an NRI, you can only make investments using your Non-Resident Ordinary or NRO account via NEFT, cheque or demand draft.
Tax Deduction at Source (TDS)
While you invest in an NRI fixed deposit, a proportion will be deducted on the amount earned as interest. If the yearly interest earned is less than Rs. 50 Lakh, you will be eligible for a TDS deduction of 31.2%. In case your interest earned annually exceeds Rs. 50 Lakh but is below Rs. 1 Crore, you qualify for a TDS deduction of 34.32%. With interest earned more than Rs. 1 Crore per year a TDS deduction of 35.88% will follow.
You get to enjoy attractive NRI interest rates in India, and the returns stay independent of market fluctuations.
With such an interest rate, you can earn lucrative returns with fixed deposits. The interest rate will depend on the type of return you choose; for example cumulative and non-cumulative, as well as the tenor you choose.
You can choose to make an investment for tenors ranging anywhere between 12 months and 36 months. You can make use of a monthly interest calculator to determine your tenor and monthly interest amount and to estimate the return on your investment.
Benefits for senior citizen
Senior citizens can enjoy a competitive interest rate as compared to the interest rate provided to investors below the age of 60 years. Such attractive interest rates provide them with greater returns, which is why senior citizens should invest in fixed deposits to secure a source of finance after retirement.
Investors can access the NRI fixed deposit monthly interest calculator with which they can calculate their interest earned and estimate their returns on their investment. To use such fixed deposit calculators, you will have to provide investment amount and investment tenor while using this online tool.
You can opt for the auto-renewal facility to reduce the hassle of filling up a renewal form at the time of maturity.
These NRI fixed deposits are regulated and guaranteed by ICRA and CRISIL (Credit Rating Information Services of India Limited). They offer a security rating to determine whether your fixed deposit investment is safe or not and to eliminate the risk involving your capital.
You get to enjoy a minimum deposit amount of Rs. 25,000 to earn attractive NRI interest rates in India. It is one of the safest investment that allows you to manage your finances effectively.
You can apply for an NRI fixed deposit online on the official website of your financial institution. You will have to fill an online application form with your personal and financial details and deposit your amount via NEFT (using your NRO account), cheque or demand draft. Save your application form by selecting the ‘save as PDF’ option. Print the application and affix your recent photograph and sign the document. Once the submitted documents are verified your fixed deposit account will be booked.
Several financial institutions and NBFCs offer such deposit account at a competitive interest rate. Bajaj Finance is one such NBFC that offers NRI Fixed Deposit at a competitive interest rate of 8.35% and up to 8.70% and a prolonged deposit tenor of 12 to 36 months with variable deposit facility.
With such attractive NRI interest rates in India, you get to earn greater returns. Moreover, you can also choose to renew after the policy matures, or alternatively, get the amount transferred to your account.