Investing In Indian Fixed Deposits: A Guide For Us Residents

Non-Resident Indians (NRIs) in the USA can invest in fixed deposits (FDs) in India to earn attractive interest income. NRIs can choose from various types of NRI FDs, including NRE Fixed Deposits and NRO Fixed Deposits, which offer different features and benefits. These FDs allow NRIs to grow their savings by offering competitive interest rates, tax exemptions, and full repatriation of funds. To open an NRI FD account, NRIs must provide certain documents, such as a valid Indian passport, proof of NRI status, and address proof for their US and Indian residences. It is important for NRIs to carefully consider their financial goals and compare the interest rates, tenure options, and other factors before choosing a fixed deposit account in India.

NRI Fixed Deposit Accounts

As a Non-Resident Indian (NRI) residing in the USA, you can manage your expenses and invest your foreign earnings in India through NRI Fixed Deposits (FD). There are several types of NRI FDs, each with its own unique features and benefits. Here's a detailed guide to help you understand NRI Fixed Deposit Accounts:

NRE Fixed Deposits

The NRE Fixed Deposit is one of the most common options for NRIs. This type of FD allows you to deposit your foreign currency earnings and earn high-interest rates. The funds and interest income in this account are fully repatriable back to America, and the interest earned is exempt from tax in India. Deposits are accepted in Indian currency, and the tenure and interest rates differ from domestic FDs.

NRO Fixed Deposits

NRO Fixed Deposits are similar to NRE deposits in terms of the currency of deposit. However, the interest rates for NRO deposits are typically the same as those for domestic deposits. Any NRI with an income source in India is required to open an NRO deposit. The money deposited in this type of FD is subject to tax.

FCNR Fixed Deposits

A Foreign Currency Non-Repatriable (FCNR) deposit allows NRIs to deposit their money in major foreign currencies such as the US Dollar, Great Britain Pound, Euro, Canadian Dollar, Japanese Yen, and Singapore Dollar. The interest earned on FCNR deposits is tax-free, and you can earn attractive interest income in the currency of deposit. Additionally, these deposits offer locked-in currency rates to protect your savings from market fluctuations.

RFC Fixed Deposits

RFC Fixed Deposits are designed for NRIs who plan to move back to India soon. These accounts accept major currencies like the US Dollar, Great Britain Pound, and Euro, and the interest earned is fully repatriable.

Opening an NRI FD Account

To open an NRI FD account, you will need to provide certain documents, including a valid passport, visa or work permit, address proof for India and the US, and a recent passport-size photograph. The process can be completed online or offline, depending on the type of Fixed Deposit Account you choose.

Benefits of NRI FDs

NRI Fixed Deposits offer several advantages, including the ability to invest your foreign earnings securely in India. Certain types of NRI FDs are also tax-exempt, and you can enjoy competitive interest rates. Additionally, you have the option to assign nominees to your NRI Fixed Deposit Accounts and avail of overdraft and loan facilities.

DBS NRE Fixed Deposit

Benefits of DBS NRE Fixed Deposits:

• High-Interest Rates: DBS NRE Fixed Deposits offer high-interest rates on foreign currency earnings, allowing NRIs to grow their savings.
• Repatriability: The funds and interest income earned in this type of account are fully repatriable back to the USA or any other country.
• Tax Exemption: The interest earned on NRE Fixed Deposits is exempted from tax in India, providing a tax advantage for NRIs.
• Safety and Security: Fixed deposits are considered a safe and secure way to deposit and save money, protecting your overseas earnings.
• Competitive Interest: DBS offers competitive interest rates on NRE Fixed Deposits, allowing NRIs to earn attractive income on their foreign currency.

Opening a DBS NRE Fixed Deposit Account:

To open a DBS NRE Fixed Deposit account, NRIs must provide the following documents:

• Valid PAN Card or Form 60
• Copy of a valid Indian passport
• Documents proving NRI status, such as a work permit, residency permit, or visa
• Recent passport-size photograph
• India and US address proof documents

DBS Treasures allows NRIs to open NRI Fixed Deposit accounts either online or offline, depending on the specific type of account chosen. The process can be completed through DBS internet or mobile banking platforms.

Interest Rates for DBS NRE Fixed Deposits:

The interest rates for DBS NRE Fixed Deposits vary and are subject to change. As of March 1, 2024, the interest rates for different deposit tenures are as follows:

• 376 days to 540 days
• 541 days to less than 2 years
• 2 years & less than 2 years 6 months
• 2 years 6 months 1 day & less than 3 years
• 3 years and less than 4 years
• 4 years to less than 5 years

For NRE Fixed Deposits of INR 3 crore and above, individuals are advised to contact their Relationship Manager or the nearest branch in India for more information.

Early Withdrawal of DBS NRE Fixed Deposits:

Early withdrawal of NRE Fixed Deposits is permitted upon written request to the bank. The interest earned will be paid for the period the deposit was held, with a deduction of a 1% penalty. However, no interest will be paid if the deposit is withdrawn before the expiry of 1 year from the date of deposit or its renewal.

DBS Treasures NRO Fixed Deposits

Features and Benefits of DBS Treasures NRO Fixed Deposits:

• Competitive Interest Rates: DBS Treasures NRO Fixed Deposits offer attractive interest rates, helping you earn higher returns on your investment. The interest rates are determined by the RBI and the bank and are subject to change.
• Joint Account Option: NRO fixed deposits can be opened jointly with resident or non-resident Indians, providing flexibility for account holders.
• Tax Considerations: While the interest earned on NRO fixed deposits is taxable in India as per the Income Tax Act of 1961, the entire interest earned can be transferred to a foreign currency account.
• Tenure Options: DBS Treasures NRO Fixed Deposits offer various tenure options, ranging from seven days to five or more years, allowing you to choose a term that aligns with your financial goals.
• Interest Payout Options: You have the flexibility to choose how often you receive your interest payments. For simple and cumulative deposits, interest is paid at maturity, while the quarterly payout option offers quarterly interest payments.
• Premature Withdrawal: You can break your fixed deposit before its maturity date; however, pre-closure charges may apply, and you need to maintain a minimum period of seven days to earn interest.
• Auto-Renewal: If you do not withdraw your maturity amount, the fixed deposit will automatically renew for the same tenure if auto-renewal instructions have been provided. Otherwise, the amount will be credited to your NRI account.

Eligibility and Documentation:

To open a DBS Treasures NRO Fixed Deposit, you must be a non-resident individual of Indian nationality or Indian origin. The required documents include:

• Valid Indian PAN card or Form 60
• Valid Indian passport
• Proof of NRI status, such as an employment/residence visa or work/residence permit
• Address proof for overseas and Indian addresses
• Recent passport-size colour photograph

For seafarers, additional documents are required, including the FEMA declaration, current work contract, and a copy of the CDC with the disembarkation stamp.

How to Open a DBS Treasures NRO Fixed Deposit:

You can open a DBS Treasures NRO FD account either online or offline. To open an account online, follow these steps:

• Log in to the DBS Treasures Mobile or Internet Banking Platform.
• Open a DBS Treasures NRO Savings account by providing the required documents mentioned above.
• Once the savings account is opened, you can book your NRO fixed deposit online through the mobile or internet banking platform.

Alternatively, you can submit an FD request form at the nearest DBS Treasures branch to open your NRO fixed deposit offline. After opening your account, a Relationship Manager will reach out to you to assist with any further queries or concerns.

Foreign Currency Non-Resident Fixed Deposit (FCNR)

Features of FCNR Accounts:

• FCNR accounts are Term Deposit Accounts, not Savings Accounts.
• You can open an FCNR account by transferring funds from your existing Non-Resident External (NRE) Account.
• The minimum deposit period to earn interest is typically one year.
• FCNR accounts can be held in various foreign currencies, including USD, EURO, GBP, JPY, AUD, and CAD.

Benefits of FCNR Accounts:

• FCNR accounts offer high-interest rates, and the interest earned is 100% tax-free in India.
• The principal amount and interest are fully repatriable, meaning you can easily transfer money overseas.
• Your funds are protected from fluctuations in exchange rates, providing risk-free returns.
• You can avail of an overdraft facility over your FCNR Term Deposit Account.
• Nomination facilities are available.
• You can avail of a loan against your FCNR deposits in rupees or foreign currency.

Overall, FCNR accounts provide a secure and attractive investment option for NRIs looking to maintain a Fixed Deposit Account in India without the risk of exchange rate fluctuations.

Tax-saving fixed deposit

If you're an NRI (Non-Resident Indian) living in the USA, you can open an NRI Fixed Deposit (FD) account to invest your money at competitive interest rates. DBS Treasures, for instance, offers NRI FDs that allow you to earn additional income at competitive interest rates.

DBS NRE Fixed Deposit

The DBS NRE Fixed Deposit allows you to earn high-interest rates on your foreign currency earnings. The funds and interest income in this type of NRI FD are fully repatriable back to America, and the interest earned is exempt from tax in India.

DBS Treasures NRO Fixed Deposit

With the DBS Treasures NRO Fixed Deposit, you can grow your savings by using your Indian income sources. You can also deposit your US earnings converted to INR and use them to create the NRO FD. This type of FD allows for higher interest earnings on income earned in India while you are overseas. The NRO FD can be opened jointly with resident or non-resident Indians.

Foreign Currency Non-Resident Fixed Deposit (FCNR)

The FCNR FD is a great option if you want to retain some of your funds in India while you are abroad and earning in foreign currency. With this type of FD, you can deposit six major types of foreign currencies and earn attractive interest income in the currency of deposit. The interest income on FCNR Deposits is tax-free, and you also get locked-in currency rates to protect your deposits from market fluctuations.

To open an NRI FD account, you will need to provide the following documents:

• Valid PAN Card or Form 60, whichever is applicable.
• A copy of a valid Indian passport.
• Documents proving NRI status, such as a work permit, residency permit, or employment/residence visa copy.
• Recent passport-size colour photograph.
• India and US address proof documents.

Frequently asked questions