According to the latest external debt reports by the Reserve Bank of India, around $94 billion worth of NRI deposits are coming up for maturity in the fiscal year 2020. This suggests that fixed deposit schemes in India are just as popular with non-residential Indians as they are with the nation’s permanent residents.
If you are currently looking for the best NRI account for fixed deposits, you should consider investing in the special NRI FDs on offer from Bajaj Finance.
Features of NRI fixed deposit schemes from Bajaj Finance
Non-residents receive additional features in their fixed deposit schemes to simplify the investment process. The following factors make investments in Bajaj Finance’s scheme easier for NRIs –
- Flexibility of tenor – NRIs can opt for investment tenor between 12 and 36 months based on their needs, financial responsibilities and other factors. This ability to choose the period of investment is often one of the most important aspects for offshore investors.
- Attractive interest rates – The best NRI accounts for FDs offer substantial returns on your investments. Thankfully, Bajaj Finance’s scheme is not an exception to this rule, offering up to 8.35% in guaranteed earnings for investors. Therefore, with this safe investment, NRIs stand to make hefty gains.
- Avail DTAA – DTAA refers to Double Tax Avoidance Agreement. While fixed deposit earnings are taxable, paying such taxes is a tricky matter. Often, NRIs need to clear taxes on such earnings, in both their country of origin and their current residential nation. However, with the DTAA clause, NRIs can avoid this double taxation and clear the taxes in any one of the countries.
Ensure you understand the fixed deposit taxation process before investing from the best NRI accounts.
How to invest in NRI FDs?
There are two types of preferred fixed deposit accounts for NRIs – NRO and NRE. NRO is the best NRI account to start investing in fixed deposits.
NRIs can park the funds they earn in India in NRO accounts. Such earnings would be deposited and deposit in rupee form. It can either be a savings account or a current account. Such accounts can be opened with a joint accountholder in India or a fellow NRI as per Section 6 of the Companies Act, 1956. You can invest in fixed deposits through the funds you have accumulated in your NRO account.
Factors to keep in mind while investing in FDs as an NRI
Before you start investing, go through the pointers mentioned below to understand the policies of FD investment in India –
- The TDS rates applicable on the interest accrued by NRI fixed deposit accounts are as follows –
- 31.2% on deposits earning an annual interest of less than Rs. 50 Lakh.
- 34.32% on deposits earning an annual interest between Rs. 50 Lakh and Rs. 1 Crore.
- 35.88% on deposits earning an annual interest of more than Rs. 1 Crore.
- Fixed deposit schemes for NRIs are valid for annual investments of up to Rs. 5 Crore, according to a new policy in effect from December 2019.
- RTGS/NEFT and cheques are valid modes to invest in NRI fixed deposits.
- The rate of interest for a fixed deposit depends on the tenor. NRIs under 60 years of age at the time of investment receive up to 8.10% annual returns on their invested sum. On the other hand, senior citizens are liable for an additional 0.25% as interest earnings through the Bajaj Finance FD.
- While residents can avail loans against their fixed deposits, the same facility is not available for NRI investors.
Fixed deposits are often considered a better investment option when compared to other schemes. Before investing, you must always check the exact yearly earnings you stand to gain from the FD. Fixed deposit calculators are available online for just this purpose. Spend some time using these calculators to understand how much you stand to gain from your current investments in Bajaj Finance’s FDs.