Fixed Deposits are popular investment options for Non-Resident Indians because of their low-risk nature and guaranteed returns. You should have accurate information about FDs and their benefits to make informed financial decisions and achieve your goals on time without stress.

An NRI Fixed Deposit is available in foreign and INR currencies, depending on the investor’s account type. It provides a safe and predictable investment option for NRIs who want to invest their international income in India. Below are some facts on this investment:

Multiple investment options in India

NRIs have the flexibility to invest in various financial products in India besides FDs. These include Mutual Funds, Bonds, Stock Investments, etc. You can invest in NRI Savings Accounts, Non-Resident External FDs, Non-Resident Ordinary FDs, Equity and Debt Mutual Funds to build a diversified portfolio aligning with your investment objectives.

Premature withdrawals with penalties

The bank allows you to hold the NRI Fixed Deposit Account for one to 10 years. You can withdraw it before maturity by paying a penalty. The amount varies across banks and depends on the deposit duration. Checking the penalty amount before investing is advisable to ensure it is manageable.

Joint FDs

NRIs can open FDs jointly with resident Indians on certain conditions. If you want to open a Joint FD, you need to keep a resident Indian as the secondary holder under the mode of operation former or survivor only. Additionally, the deposit should receive funds from an NRE or NRO Account, depending on its type.

Tax benefits

All NRIs are eligible to receive tax benefits on FDs in India. The tax implications may vary depending on the account type and resident country. For example, the interest on NRE FD and FCNR Deposits are tax-exempt in India but may include taxes in the country of residence. It would help if you enquired about these before opening the account online.

Renewal after maturity

If the bank allows, you can renew your NRI FD Account after maturity. You can now perform the renewal process from the mobile app without visiting the branch. Check with your bank about the renewal procedure before investing in an FD.

Fund repatriation

NRIs can repatriate the interest and principal amounts from their FDs, subject to certain conditions. You can also convert the funds into another currency before repatriation, subject to the prevailing exchange rates and RBI guidelines. The funds in an NRO FD can get repatriated subject to income tax deductions. You can repatriate only up to USD 1 million per financial year on income from selling assets in India.

Loan facilities

Banks offer Loans against FDs, using the FD amount as collateral. The interest rates are usually lower than other types. You can also open a Foreign Currency Non-Resident or FCNR Deposit in international currencies like USD, GBP, EUR, and others, repatriate the funds, and earn tax-free interest income in India.