Things To Note About NRI Fixed Deposits

Investments are a great way to multiply your funds. They let you use your idle money to earn extra. A savings account is an excellent fundamental scheme for storing your income with regular accessibility. However, term deposits are ideal for gaining sustainable returns by locking in your funds. 

As a person of Indian origin residing abroad, NRI fixed deposits is the ideal investment instrument to get assured returns. Here are some of the things you should know before investing: 

Types: There are three primary forms of NRI deposit accounts. They serve specific purposes. It is best to compare them and choose the one best suiting your needs. 

• Non-Resident External: It is an ideal option if you want to manage your foreign income in India. Your transferred funds are maintained in Indian currency throughout the deposit term. These funds are then sent in the original denomination upon maturity to your overseas account. You get tax exemption on the principal amount and interest in NRE FD.
  
  
• Non-Resident Ordinary: This is specifically useful if you have income sources in India like rent, commissions, business profits, etc. It allows you to earn considerable interest on such earnings in Indian currency. You can easily maintain NRO FD by joint ownership with a resident Indian.
  
  
• Foreign Currency Non-Resident: This is another type of NRI FD. It lets you maintain your foreign income in your home country in its original nature. This gives scope for easy transferability. It accepts multiple currencies, which is an essential factor affecting your returns, unlike NRO FD interest rates. You can benefit from it if you have global income. 
  
  

Opening procedure: Once you decide on the type of account, you can easily open one through an online and traditional approach. The online method allows you to open it within minutes directly on the bank's website. You can do this from anywhere. The offline system is apt when you want to open the NRI FD on your visit to India. 

Documentation: You then submit the supporting paperwork. An online application is ideal for scanning them, whereas an in-person opening requires you to submit a hard copy. These documents include your Indian passport copy, PAN card, visa/residence permit, Indian and overseas address proof, etc. 

Interest rates: You get assured returns on NRI FDs like domestic fixed deposits. However, the NRE FD interest rates and other forms are affected by internal and external factors. It depends on the banks' policy, duration, and other factors. The only way to calculate the interest is by considering all these aspects.