Non-Resident External (NRE) and Non-Resident Ordinary (NRO) are the two kinds of accounts that a Non-Resident Indian (NRI) can hold in India. Both have certain differences in terms of the source of deposit, repatriation, tax, etc.

NRE vs. NRO

• Only income earned in the resident country can be deposited in an NRE account, whereas an NRI can use an NRO account also to deposit income earned in India, like dividends, rent, etc.
• A joint NRE account can be opened with another NRI, but a joint NRO account can be opened either with an NRI or a resident Indian.
• Up to USD 1 million can be repatriated per year from an NRO account while there is no such limit for NRE accounts.
• The interest earned on an NRO account is taxable, while that which is earned in an NRE is not. But the NRE account is still subject to the tax levied by the NRI’s resident country.

NRIs cannot have a normal savings bank account like other Indians and the Reserve Bank of India (RBI) has imposed certain limitations on the type and extent of investments they can do in India. The Foreign Exchange Regulation Act (FERA) has laid down some rules that NRIs need to follow while investing in India, and the inflow and outflow of money from their accounts is also monitored.

NRI fixed deposit

In such a scenario, fixed deposits are one of the safest and most steady NRI investment options in the country today. Choosing the right fixed deposit is important to earn high returns. Banks are currently providing 6% to 7% interest rate on FDs, and these figures are always affected by REPO rate cuts imposed by the Reserve Bank of India (RBI). A better option would be fixed deposits provided by Non-Banking Financial Companies (NBFCs) as they generally give 1% to 2% higher interest than banks and have other facilities that make investment convenient. For example, Bajaj Finance FD is an NBFC providing up to 8.70% interest, which is not affected by market fluctuations or REPO rate cuts.

Getting the best of your NRI fixed deposit

An amount of INR 800 billion remains parked in NRO accounts. India is also the top receiver of remittances ($80 Bn). You can use an NRO account to open a Bajaj Finance FD.

Below are their interest rates for NRI fixed deposit:-

Senior citizens receive an additional 0.35% and existing customers, 0.10% interest on their FD.

According to your necessity, you can choose to go for a cumulative or a non-cumulative FD. Cumulative FD has a higher interest rate and helps you accumulate a large corpus for distant financial goals. Non-cumulative FD gives periodic interest payouts – you can choose from monthly, quarterly, half-yearly, and yearly payout, to take care of daily expenses by maintaining liquidity. Along with some of the best interest rates in India on NRI fixed deposit, Bajaj Finance FD is also one of the safest funds. It holds the highest stability ratings by reputed rating agencies – it has CRISIL’s FAAA/Stable and ICRA’s MAAA (stable) rating.

Before investing, it is wise to assess your returns with a fixed deposit calculator. Just feed in the amount you’re looking to invest and the tenor of investment, and you’ll see the exact returns that you can expect.

Author Bio:

Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory