#nro fd

NRIs who want to keep their India-based earnings in India, usually hold either NRO or NRE accounts. These are fairly popular deposit options exclusively available to them, giving them a good rate of return and placing their funds in India. This article will look at what NRE Fixed Deposit and NRO Fixed Deposit accounts are and how they are different from each other.

NRE Account- NRE is an acronym for the Non-Resident Rupee/External account. An NRE Fixed Deposit Account is where the Indian residing overseas makes deposits from there and sends the same in an Indian account. The money after reaching gets converted into Indian currency (Rupees).

NRO Account:- An NRO Savings account is a Non-Resident Ordinary Rupee Account, usually opened by an NRI to manage the income in any form (like rent, pension, or other types of dividends) that is earned in India.

How are NRE and NRO accounts similar/different?

1. Tax Exemption

The interests earned from NRO fixed deposits and credit balances are taxable at a rate that is higher than the domestic FD tax rates. Wealth and gift taxes are also applicable to such interests.

The interests earned from NRE fixed deposits are not taxable; hence, they are completely tax-free.

2. Repatriability or Transferability

Individuals with NRO FDs are not allowed to transfer the principal investment; only the interest earned (net of applicable taxes in the financial year) can be transferred to a foreign account.

NRE fixed deposit allows full repatriation of funds including both principal amounts and earned interests to the foreign accounts.

3. Joint accounts

An NRO account can be opened jointly with an NRI as well as an Indian resident. NRE fixed deposits can be opened jointly with another NRI but not with an Indian resident.

4. Deposits and Withdrawals

An NRI can only deposit funds in an NRO account if they are originating in India, and ultimately in his/her NRO fixed deposit. Hence, transferring funds from abroad for the same is also not allowed.

However, the transfer of funds from the NRE account to the NRO account for the same is allowed.

Although, you cannot open NRE fixed deposits by transferring currency from an NRO account.

Regardless of the deposition, all withdrawals can only be done in Indian currency.

5. Interest Rates

Although the rates of interest may vary for NRE and NRO FD accounts according to the banks, usually, they are offered with maturity between 1–20 years.

6. Proneness to Exchange Rate Fluctuations

The NRE FD Accounts are prone to the risk of conversion loss and exchange rate fluctuations regarding the value of the Rupee against the foreign currency. However, there are no such risks involved with NRO FD accounts.

If you are living outside India chances are that you have healthy savings. Just saving the money is not enough because inflation will eventually depreciate the value of the money which is why it is important to grow your money by investing it in the right place. You can always take advantage of the difference between foreign and Indian currencies. This means that at the end of the day you will invest more than what you would have had you been living in India.

India has seen tremendous growth in the past two decades. As a result, the country is attracting a great deal of foreign direct investment. This has prompted NRI investors to consider India as the right market to invest in. At the same time, as an NRI it is important to have the right strategy for your investment, or else you might lose all your savings altogether. One of the best options to invest in is fixed deposits. At SBM private health, NRIs get a wide array of options for fixed deposits so that they can choose as per their need. NRIs can start fixed deposits through FCNR, NRO, and NRE accounts. NRI fixed deposits are a great option to invest if you have the estimate of the time by when you might need the amount invested as you'll not be able to withdraw before maturity. One of the great advantages of NRI fixed deposits is that there is no upper limit to how much you can invest. Also, it has a very simple documentation process. All you will need is a passport, work permit, ID proof, and bank details. The investment opportunity is available to not just NRIs but also PIOs (Persons of Indian origin) as well. The PIO must have held an Indian passport at any point in time and their parent, or their grandparent must have been a citizen of India under the Constitution of India or India Citizen Act 1955. If they are a spouse of an Indian Citizen or spouse of PIO, then they can also be considered as a PIO.

You may consider opening an NRE account fixed deposit with SBM private health to invest your foreign earnings in India. With this fixed deposit, you get the advantage of attractive NRE account interest rates with quarterly compounding. You also get flexible tenure and tax-free returns. At the same time, your earnings are fully and freely repatriable, both principal and interest. Do note that these earnings may be taxable in your residence country.

The other NRI fixed deposit to consider is the NRO FD. The deposit provides quarterly compounding on NRO FD rates. You can for instance use this deposit to invest your rental income and warnings from dividends, to see them grow. Just like an NRI account, the NRO account also provides attractive interest rates with quarterly compounding and flexible tenure. In this case, the interest is fully repatriable after the payment of taxes. This deposit gives you the flexibility of jointly opening the account with other NRIs/PIOs and Resident Indians. The interest rate ranges from 5 to 7% depending on the tenure of the deposit. With SBM's support, you can open your NRO account in no time by producing the relevant documents.

You also have the option to open an FCNR account (foreign currency non-resident). The interest that you earn is tax exempted and foreign exchange fluctuations have no impact on the deposits in the FCNR deposit.

If you want to take things a notch higher, then you can amplify your wealth with guaranteed returns on SBM NRI Superia Deposit. This deposit is available in multiple currencies. The deposit guarantee is higher returns than NRE/FCNR deposits. It provides tax-free returns in India and is freely repatriable. You also get the flexibility of different 10 years and simplified documentation. For more details do visit the SBM private wealth website at SBMbank.co.in

As a Non-Resident Indian (NRI) you might be looking for some smart investment opportunities to diversify your portfolio and to grow your savings. This is why you should consider investing in NRI fixed deposits offering lucrative interest rates to NRIs.

SBM Bank India offers FDs for three types of candidates Non-Resident Indians (NRIs), Overseas Citizen of India (OCI), and Person of Indian Origin (PIO). If you are either one of them, you can apply and choose any tenure between 1 year to 3 years, as per your financial requirements.

Which types of NRI Fixed Deposit are best for you?

You can choose from majorly four types of NRI fixed deposit accounts.

NRE Fixed Deposits –You can deposit your earnings as savings in the branch and obtain higher interest rates given by the bank. However, the tenure of the NRE FD might differ from a domestic FD along with the interest rates. The biggest benefit of an  NRE account fixed deposit is that the interest is fully repatriable and exempted from tax.

NRO Fixed Deposits –Same as NRE FD, except the interest rates, are the same as the domestic deposit, and the money is taxable. However, if you have a source of income in India, opening an NRO account is essential if you don’t want to pay penalties. Also, you can invest your money only through NRO accounts as an NRI.

FCNR Fixed Deposits – You can deposit your money in foreign currencies like Pound, USD, Euro, CAD, Japanese Yen, and the Singapore Dollar, which are accepted all over the world.

The Eligibility criteria for all the deposits are summarized below

NRO  deposit

Currency:- Indian rupee

Repatriability:- Interest fully repatriable after payment of taxes

Eligibility:- PIO/ Individual NRI

Joint Account Facility:- Available

Tax:- Interest might be subjected to tax

Tenure:- 1 year to 10 years

NRE deposit

Currency:- Indian rupee

Repatriability:- Fully and freely repatriable

Eligibility:- PIO/ Individual NRI

Joint Account Facility:- Available

Tax:- Not taxable

Tenure:- 1 year to 10 years

FCNR deposit

Currency:- USD, GBP, JPY, Euro, CAD, SGP, AUD

Repatriability:- Fully repatriable(Interest and principal)

Eligibility:- PIO/ Individual NRI

Joint Account Facility:- Available

Tax:- Not taxable

Tenure:- 1 year to 5 years

Documents required for NRI fixed deposit account

The FD can be booked online or at the branch of the bank. However, most investors prefer to do it online.

Passport – It should have the name, address, DOB, photograph, and signature of the candidate.

Visa - Visa records are ought to contain important documents like the work license, and permanent resident visa. Apart from that, the resident permit and employment visa are also presented.

Why should you get an NRI Fixed Deposit?

Offers a high rate of returns Check rates offered by SBM Bank India.

Overdraft and loan facilities can be taken on the FD.

NRI FDs are highly safe and secure modes of investment.

Some types of NRI FDs are exempted from tax.

An option of nomination is allowed for the FD.

India is an attractive destination for investment. NRIs can leverage this and put their money to good use. This blog explains why, where, and how you can make an NRI investment in India. 

Why should NRIs invest In India?

India is one of the world’s fastest-growing economies. This is why India is an excellent country to invest your wealth in, at the same time help your homeland. Also, most Indians plan on getting back to India for their retirement or even before, which is why they engage and invest in the Indian economy. 

 Another reason to invest in India in the presence of a stable government and the flow of foreign investments. This has led to an immense scope of growth for your investments. The GDP growth rate of India is one of the fastest among major economies. 

Here are 3 reasons why NRI investment in India is a good option:

Growth Story Intact:

Consumption in India is expected to triple to that of 2018 by the year 2025. India is set to be the fifth-largest economy in the world overtaking the UK. Expanding economy means, companies have potential. Therefore it makes sense to invest in India as an NRI.

Demographic in India:

65% of the population of India is under the age of 35, and of consumerist mentality and an appetite to spend. This demographic focuses on improving their lifestyle which means companies have the potential to do better. This is yet another reason why investing in India can be good for an NRI. 

Big-spending corporates:

MNC like Ikea, Netflix, are investing in Indian markets be it their marketing or operations realizing the potential of the country. NRIs can get on the bandwidth and make their wealth work for them. 

Where can you invest as an NRI?

Here are a few attractive NRI investment in India that you can explore:

Equity investments:

NRIs can directly invest in equity using their Demat account linked to their NRO account. However, research is necessary before buying the stocks of a company. 

Mutual Funds:

Mutual funds allow you to choose a comfortable plan for you to invest in taking into account your financial profile and risk appetite. 

Real Estate:

A common notion that NRIs cannot invest in real estate in India is untrue. NRIs can invest in any residential property, however, they cannot make investments in agricultural projects. 

Also read,- 7 Myths about NRI home loans. 

Government bonds:

There are multiple zero risks and low returns options that NRIs can choose from if you have a low-risk appetite. 

How to invest in India as an NRI?

NRIs can invest in India through their banks just like everyone else. There are attractive products in the market that can help you with your investments. You can also get professional help from bankers as well as financial advisors. 

Also, read- Investment planning mistakes by NRIs

The NRO FD is for the NRIs and PIOs who wish to invest their foreign earnings in their home country and want to retain their money in their home country. NRO FD rates are higher and give you higher returns on your investments. One of the safest investments in 2020 is NRO FD. High return and safe investments. NRO FD can be jointly opened by the NRI and resident Indian.

SBM Bank NRO Deposit

Invest your Indian rupee earnings and enjoy attractive returns with SBM NRO Deposit.

Benefits of Investing in SBM Bank

Attractive interest rates with quarterly compounding

Flexible tenure

Interest fully repatriable after payment of taxes

Can be jointly opened by NRIs/PIOs and Resident Indians

High returns

Less risk

NRO FD Rates

For Domestic/ NRO Rate of Interest w.e.f. – 26.06.2020 

Fixed Deposits (All Maturities)

Tenor Deposit of NRO FD  below Rs. 2 Crore 

7-14 days:- 3.50% 

15-30 days:- 3.75% 

31-45 days:- 4.25% 

46-60 days:- 5.50% 

61-90 days:- 5.50% 

91-120 days:- 5.50% 

121-180 days:- 5.50% 

181-210 days:- 5.75% 

211-269 days:- 5.75% 

270 below 1 year:- 6.00%

1 year to 389 days:- 6.50% 

390 days to 2 years:- 6.50% 

2 years up to 3 years:- 7.50% 

3 years up to 5 years:- 6.50% 

5 years up to 10 years:- 6.50% 

Fixed Deposits (All Maturities) Tenor Deposit:- 2 Crore up to 5 Crore 

7-14 days:- 3.50% 

15-30 days:- 3.75% 

31-45 days:- 4.25% 

46-60 days:- 5.50% 

61-90 days:- 5.50%

91-120 days:- 5.50% 

121-180 days:- 5.50% 

181-210 days:- 5.75% 

211-269 days:- 5.75% 

270 below 1 year:- 6.00% 

1 year to 389 days:- 6.50% 

390 days to 2 years:- 6.50% 

> 2 years up to 3 years:- 6.75%

> 3 years up to 5 years:- 6.50% 

> 5 years up to 10 years:- 6.50%

NOTES: 0.5% additional benefit for senior citizens (only applicable for deposits for Resident Indians). 

Disclaimer: Above rates are subject to change without prior notice. Depositors may please confirm the rate with respective branches before the investment.

When you’ve saved up enough money in your savings account, you can use the opportunity to earn higher interest rates on it, as opposed to the basic 3% or 4% interest you earn on your savings – you can open a fixed deposit. The term ‘fixed’ implies that your deposit can be maintained for a specific period or term, which is why FDs are also known as term deposits. These deposits can be opened by both, Resident Indians and well as Non Resident Indians. If you are an NRI looking to open an NRI fixed deposit, this article is for you.

·         Types of FDs

You can create three types of fixed deposits as an NRI – Non-Resident External Rupee or NRE FD, Non-Resident Ordinary Rupee or NRO FD and Foreign Currency Non- Repatriable or FCNR FD. While the first two FDs are created in INR, the third type of FD may be created in foreign currencies (as is apparent from the term). Creating the foreign currency deposit is just as safe as creating NRE or NRO deposit, since you don’t have to worry about currency fluctuation on maturity.

·         Currencies of Deposits

While the NRO fixed deposit is a Rupee deposit, NRIs can create FDs in several major international currencies. These include the US Dollar, Great Britain Pound Sterling, European Euro, Japanese Yen, Australian Dollar, New Zealand Dollar, Singapore Dollar and Hong Kong Dollar. Other accepted currencies for NRI deposits include the Swedish Krona, Danish Krone and Swiss Francs.

·         Investment term

Typically, FDs for NRIs can be created for a period of 7 days at minimum, whereas the maximum deposit term is 10 years. Note that the 7 days to 10 years term is applicable only on NRO and NRE Fixed deposits. In case of foreign currency deposits, the minimum and maximum investment term is 12 months and 5 years respectively.

·         Interest rates

The interest you can earn on your NRI deposit depends upon the type of deposit you own. Since you would be depositing foreign currencies in your FCNR and NRE account FD, the interest rates are different as they are set on the basis of LIBOR/SWAP rates. In case of NRO deposits, most banks offer the same interest rates as those offered to resident Indian FD holders, since the NRO account is essentially a rupee account.

·         Joint holding

All NRI deposits can be held jointly with another individual. However, the individual you assign as a joint holder can differ based on the type of FD you’ve opened. For instance, in case of NRE or foreign currency FD, the joint holder should be another NRI. On the other hand, in case of NRO fixed deposits, the joint holder should be a resident Indian.

·         Premature withdrawal

Although FDs are meant to last through the deposit term; many banks also allow you to withdraw your NRI deposits, before the term ends. You can withdraw your deposit in a financial emergency. However, you have to pay a small penalty for premature withdrawals – typically 1% of the interest earned on the FD. Also, the premature withdrawal penalty is waived off, after a specific period of holding the FD.

Final word:

As a Non-Resident Indian (NRI) you might be looking for some smart investment opportunities to diversify your portfolio and to grow your savings. This is why you should consider investing in NRI fixed deposits offering lucrative interest rates to NRIs.

SBM Bank India offers FDs for three types of candidates Non-Resident Indians (NRIs), Overseas Citizen of India (OCI) and Person of Indian Origin (PIO). If you are either one of them, you can apply and choose any tenure between 1 year to 3 years, as per your financial requirements.

Which types NRI Fixed Deposit is best for you?

You can choose from majorly four types of NRI fixed deposit accounts.

NRE Fixed Deposits –You can deposit your earnings as savings in the branch and obtain higher interest rates given by the bank. However, the tenure of the NRE FD might differ from a domestic FD along with the interest rates. The biggest benefit of NRE account fixed deposit is that the interest is fully repatriable and exempted from tax.

NRO Fixed Deposits –Same like NRE FD, except the interest rates, are the same as the domestic deposit, and the money is taxable. However, if you have a source of income in India, opening an NRO account is essential if you don’t want to pay penalties. Also, you can invest your money only through NRO accounts as an NRI.

FCNR Fixed Deposits – You can deposit your money in foreign currencies like Pound, USD, Euro, CAD, Japanese Yen, and the Singapore Dollar, which are accepted all over the world.

The Eligibility criteria all the deposits are summarized below

NRO  deposit

Currency:- Indian rupee

Repatriability:- Interest fully repatriable after payment of taxes

Eligibility:- PIO/ Individual NRI

Joint Account Facility:- Available

Tax:- Interest might be subjected to tax

Tenure:- 1 year to 10 years

NRE deposit

Currency:- Indian rupee

Repatriability:- Fully and freely repatriable

Eligibility:- PIO/ Individual NRI

Joint Account Facility:- Available

Tax:- Not taxable

Tenure:- 1 year to 10 years

FCNR deposit

Currency:- USD, GBP, JPY, Euro, CAD, SGP, AUD

Repatriability:- Fully repatriable(Interest and principal)

Eligibility:- PIO/ Individual NRI

Joint Account Facility:- Available

Tax:- Not taxable

Tenure:- 1 year to 5 years

Documents required for NRI fixed deposit account

The FD can be booked online or at the branch of the bank. However, most investors prefer to do it online.

Passport – It should have the name, address, DOB, photograph and signature of the candidate.

Visa - Visa records are ought to contain important documents like the work license, and permanent resident visa. Apart from that, the resident permit and employment visa are also presented.

Why should you get an NRI Fixed Deposit?

Offers a high rate of returns Check rates offered by SBM Bank India.

Overdraft and loan facilities can be taken on the FD.

NRI FDs are highly safe and secure modes of investment.

Some types of NRI FDs are exempted from tax.

An option of nomination is allowed for the FD.

Crisis period comes and go, but as an investor, you stare at huge losses, especially, if the portfolio is not well spread out and is restricted to a particular asset class. Even if the economic health remains hunky-dory for a few years, one should always be wary of the impending crisis that may emerge in any form and any time and completely shake the optimism.

Take for instance the current scenario, where the outbreak of coronavirus pandemic has not just roiled the world equity markets but also dragged the commodity and bullion prices sharply. One should stay calm and not get perturbed in such situations and spot opportunities and invest in different asset classes that will fetch decent returns once the market revives.

Here are some quick tips to keep in mind and use investment intelligence to invest in different asset classes and to build a diversified portfolio.

1) Invest in companies with low risk

While the economic activity has come to a standstill due to fast-spreading coronavirus threat, one should avoid investing in companies that are highly leveraged or speculative. The focus should be on finding companies with good cash flow and low debt for the safest investment options. And as a general guideline, try not to take any major risks at an already uncertain time. 

2) Invest in Companies providing essential commodities

 After the carnage on Dalal Street, most of the sectoral stocks are now available at lip-smacking valuations. But one should be aware that economists are already predicting a severe slowdown and a likely global recession going ahead, which could hurt the investment sentiment. Hence, it's a good idea to focus on consumer staples or essential items that people will need (and buy) regardless of their financial situation. They typically include food, beverages — including alcohol — certain household goods and tobacco.

3) Invest in Non-cyclical Industries

In times of uncertainty, it's best to focus on finding non-cyclical industries offering goods and services that are in constant, year-round demand. In addition to the consumer staples mentioned above, these recession-resistant industries include grocery stores, discount stores, alcohol manufacturers, and cosmetics.

4) Diversify your investment

Always believe in the old saying, do not put all your eggs in a single basket. Diversifying across industries will protect you from greater losses if a particular product or industry loses value. Equally important is diversification across asset classes, e.g., equities, in addition to fixed income and commodities. Several fixed income products of good mutual funds tend to do well because of diversification into government bonds, commercial papers, etc. Commodities like crude prices are currently ruling at multi-year lows, but improvement in demand scenario and better economic growth prospects will lift sentiment.

5) Invest in companies providing good Dividend

Place your bet on listed companies that has a history of declaring a good dividend. Dividend stocks create a passive income. It’s generally recommended to look for companies that have low debt-to-equity ratios. To be on a safer side, focus only on fully reliable companies, i.e. those that have increased their dividend payouts for at least 25 consecutive years.

6) Invest in bullion

It has been seen in the past that investing in precious metals, particularly gold, during uncertain times has fetched better returns due to investors appetite for safe-haven assets. Recently, while gold prices also took a beating along with other asset classes, experts believe that prices of yellow will bounce back soon. Investors can choose to invest in gold through Exchange Traded Funds (ETFs) by not physically owning it.

7) Invest in deposits

Having a fixed source of income is essential that why you should also invest in Fixed deposits, it is safe and gives you a stable income. Because even if all other investment's fail, you will still have some money if you have invested in Deposits. 

And if you are a Nri and want to invest in India then You should definitely open a nri saving account or a nre savings account then this is the right time for it. As it will help you to invest in Less risky stocks, and also gives you the opportunities to invest in bullion.