While the Indian economy passes through its slowdown in economic activity, banks have been steadily cutting down the interest rates of all deposit accounts. NRI deposit accounts are no exception to this trend. While NRIs have an option of parking money in Indian Rupee or foreign currency, they have to bear the differential interest rates on the two.
Let us look at the various types of accounts and their benefits along with NRI fixed deposits.
Non-Resident External (NRE)
This account is provided to NRIs to invest their foreign earnings as India rupee and gain high returns. Normally NRE deposit accounts offer slightly higher interest rates on fixed deposits than normal Indian fixed deposits.
- Nature of investment– Usually both the principal and interest are repatriable and fixed deposits for NRIs up to 5 years. NRE accounts are important as you can use it to create direct investments in India or business activities.
- Joint account and repatriation – However, one cannot hold an FD jointly with another Indian resident and the income earned here cannot be deposited in these accounts. Hence it has to be repatriated.
- Tax – The earnings in this account and associated FDs are non-taxable as per the applicable tax laws for NRIs.
Non-Resident Ordinary (NRO)
- Currency and repatriation – These are opened only in Indian Rupee and there is no repatriation option available on the principal. Only the interest earned is repatriable.
- Joint account– This account can be opened jointly with another Indian citizen.
- Tax– The interest and principal on NRO FDs are taxable at the rate of 30% as per Indian Income Tax laws
Thus, with these advantages, many people opt for the NRE FDs. However, if you need to still open an FD for money to be used here and to invest here, you can utilise company FDs which require an NRO account to be operated upon. Bajaj Finance FD is one such investment for NRIs which can be made through an NRO account.
Bajaj Finance FDs for NRIs
Company FDs like Bajaj Finance FD offers an interest rate of 7.80% for the maximum tenor if you are a new customer. You can look forward to an additional 0.25% if you are a senior citizen and an additional 0.10% if you are an existing customer. You need to pay the following Tax Deducted at Source for NRI deposits –
| If annual interest on deposit is less than Rs.50 lacs | If annual interest on deposit is more than Rs.50 lacs, but less than 1 Cr | If annual interest on deposit is more than Rs.1 Cr |
| 31.2% | 34.32% | 35.88% |
Other benefits of Bajaj Finance NRI deposit accounts:
- You can make payment through, cheque, RTGS/NEFT from NRO account.
- You can get take benefits of multi-deposit facility through a single cheque. Thus you can have multiple FDs with just one deposit.
- With high credibility of ICRA’s MAAA/Stable rating and CRISIL’s FAAA/Stable rating, you can avail the highest safety standards for your fixed deposit investment in India.
- You can also opt for different pay-out intervals such as monthly, quarterly, bi-annually or annually.
These FDs can also be availed as short-term investment plans for meeting your financial goals.
