As per reports from the Economic Times, the Indian rupee is about to have a precarious year considering that approximately $94 billion of a total of $130.4 billion of NRI accounts will be maturing this year. With a part of these crossing shores, it will surely have a considerable impact on India’s GDP. It is largely owing to the trends of preferences for short-term deposits that are fetching attractive returns.
NRI funds have been widely distributed into two kinds of deposits, NRE and NRO. These two types of accounts help NRIs to manage their finances both in India and abroad. According to the guidelines provided by the Foreign Exchange Management Act (FEMA), NRIs are not allowed to have a savings account in their name in India. It is imperative that they convert their savings into either form –
- Non-Resident Ordinary Rupee (NRO)
- Non-Resident Rupee (NRE)
Non-Resident Rupee (NRE)
NRE is an Indian rupee-denominated account that provides robust security. It can be in the form of fixed deposits, savings, recurring or current. The foreign currency submitted into NRE account gets converted into INR and, enabling an account holder to repatriate the deposited funds in his/her account. Additionally, the interest on one’s corpus is non-taxable as well. Transferring money from one’s resident country to India attracts no additional charges; whereas the earned interest is comparatively better.
In an attempt to look for smart investment opportunities that would boost their corpus, NRIs often prefer to invest in fixed deposits that fetch guaranteed returns. It is coupled with an attractive rate of interest that can substantially present opportunities to grow their savings in NRE accounts.
Considering the beneficial returns that individuals are offered via fixed deposits, multiple lenders offer fixed deposit schemes for NRI account holders. However, individuals must take into account the rate of interest provided by the lender in question since it determines the margin of saving that one has on their corpus. Such savings can also help save money and secure one’s retirement.
However, one needs to make a careful survey of lenders available in the market before settling upon anyone for their investment. Under such circumstances, approaching reputed financial institutions like Bajaj Finance and availing their Fixed Deposit is the preferred option. Such term deposits from this lender come with an attractive rate of interest –
The cumulative rate of interest
- 12 to 23 months: 8%
- 24 to 35 months: 8.05%
- 36 months: 8.35%
Non-cumulative interest rate
- 12 to 23 months: 7.72% (monthly), 7.77% (quarterly), 7.85% (half-yearly), 8% (annual)
- 24 to 35 months: 7.77% (monthly), 7.82% (quarterly), 7.89% (half-yearly), 8.05% (annual)
- 36 months: 8.05% (monthly), 8.10% (quarterly), 8.18% % (half-yearly), 8.35% (annual)
Additionally, with the aforementioned cumulative and non-cumulative fixed deposits interest rates, such term deposits also come with numerous borrower-friendly features –
- A minimum deposit of Rs. 25,000
- A higher stability of a corpus
- High credibility with CRISIL’s FAAA, and ICRA’S MAAA rating.
- Auto-renewal facility.
- NRE FD calculator.
- Flexible tenor.
- Assured returns.
Such schemes also help investors avail loans against the deposits. Thus, individuals, in cases of emergencies, do not have to liquidate their savings. Potential borrowers can avail advances of up to Rs. 4 Lakh.
Keeping in mind the host of benefits that fixed deposits come with, lenders often streamline the application process and integrate online form filling to help investors save time. All that one needs to do is follow these steps –
Step 1: Fill the details in the online application form. Deposit your corpus via NEFT/RTGS, cheque, or net banking.
Step 2: Save this filled-out application form by opting for ‘save as PDF’ option. A representative of the lender in question will soon contact you.
Step 3: Print out this filled-in application form, assemble your KYC documents and affix your photograph on the printed application form.
Step 4: Furnish all required paperwork with a cheque. Ensure it is CTS compliant.
Following this, an FD on your NRI account has been booked.
Such term deposits bring with it multiple add-on benefits for NRE account holders, such as
- Tax-free principal and interest.
- Can be opened jointly with another NRI.
- Flexible tenor as per convenience.
Individuals need to carry out thorough market research before settling upon a fixed deposit. Considering that NRE account holders go for the best fixed deposit interest rates in 2019, it results in additional savings on their corpus and hence it is considered as a simple way to strengthen one’s finance.
Taking into account the number of fixed deposits on NRI account that are set to mature in 2019, it is evident that India’s GDP is set to witness a significant change. The country at present holds about a total of $130.4 billion in NRI deposits. Such a high number of accounts are because Indian financial institutions continue to offer an attractive rate of interest on fixed deposits.
Considering the stringent laws about saving account owned by NRIs in India, these accounts are primarily done via two kinds of deposits – NRE and NRO. Of this, NRE is the most preferred one considering that it brings along the additional feature of providing robust security. While this deposit can be in the form of current, savings, recurring and fixed deposit, the latter is opted for its competitive rate of interest and non-taxable features.
With reputed financial institutions, the interest rates may be up to 8.35% for cumulative interest for 36 months. Following the guaranteed attractive returns on FDs, multiple NRI accounts are now opting for term deposits and witnessing a significant boost while saving for the future.