Everyone values money. You invest in several financial products for better returns and wealth creation. All Indians have plenty of investment products to meet their financial requirements. But what about non-resident Indians? How do they invest in India? The answer to this is an NRE Fixed Deposit. The bank holding your Non-Resident External or NRE Account allows you to open an FD to park your surplus funds.
Deposit your foreign income into these accounts and enjoy better returns, preferential tax treatment, and the flexibility to repatriate funds abroad. Consider these reasons for investment:
No income tax on interest earned
The Indian income tax laws consider the interest income from NRE Accounts and NRE FD exempt according to Section 10(4) of the Tax Act, 1961. Due to this exemption, the bank does not deduct taxes on the interest income of the NRE FD. NRIs do not worry about any taxation-related compliance, including tax payment and return filing, while remitting funds to these accounts.
Better interest rates
The interest rates for the NRE FD Account in India are not subject to the approval of the Reserve Bank of India. Therefore, banks provide different interest rates on these accounts, ranging from 4.5% for one year to 375 days to 4.35% for five years and above. Therefore, you can consider this scheme for generating better and guaranteed returns.
Repatriation flexibility
The balance outstanding in FDs is freely repatriable outside India. Without restrictions, you can transfer the balance and interest income from this NRI FD to your home country. It gives you the flexibility to help your loved ones in India in an emergency without worrying about your financial status.
Maintenance
Once the account gets credited with foreign currency, the amount gets converted into domestic currency at the prevalent exchange rates. After that, the balances maintained are in Indian currency, and the deposits stay insulated from foreign currency exchange risks.
How to open it?
It is simple to open the NRE Fixed Deposit, NRO FD, and FCNR Accounts in any bank. You submit the form and the required documents, including a passport, valid work permit, and Indian and overseas address proof. They need self-attestation and attestation by a banker, notary, embassy, or consulate official. You can upload them directly on the bank’s website or app with the duly filled form.
Distance is never a barrier, thanks to technological innovations. The bank provides internet and mobile banking facilities to all NRIs to invest and open accounts remotely. Without visiting the branch, you can conduct all banking activities on the app and remit money to your home country.
Conclusion
Make the most of your NRI investments with these products and fight all your financial woes. You earn attractive interest on the idle funds, which are fully and freely repatriable to your resident country.