A non-resident Indian with a stipulated income source domestically must open a Non-Resident Ordinary or NRO Account to deposit it. Any person residing for more than 120 days abroad with less than 365 days stay in four previous years in India is declared an NRI as per the Union Budget 2020’s proposal. NRIs can opt for Loans against the NRO Fixed Deposit to meet emergency expenses arising either in India or in their respective country of residence.
Since these credits are provided against collateral, the interest also becomes considerably lower than unsecured Loans. Consider these uses:
Automatic renewals
You can continue earning interest on any type of NRI Fixed Deposit through automatic renewals. The principal and interest payments on the deposit get renewed automatically upon maturity. It is beneficial to analyse and compare options between different banks online before selecting the apt one.
Repatriate the interest earned
The interest earned according to the NRO FD rates in the current financial year is fully repatriable after tax deductions. The higher amount you invest in this deposit, the better the returns and interest rates. However, you can repatriate funds only up to a certain limit. Therefore, mapping your financial status is key.
Principal amount repatriation
You can repatriate funds up to USD 1 million per financial year for all bonafide purposes from the NRO Account. You can also opt for partial withdrawal of the deposits and encounter your immediate needs.
Flexible tenure
You can select the deposit tenures for NRI, NRO, FCNR, and NRE Deposit as per your financial requirements. The term may range from seven days to 10 years. These deposits are also available online on bank apps for immediate and convenient access. You skip all the paperwork, save time, and track investments from your smartphone.
Competitive interest rates
You enjoy competitive NRO FD interest rates while opening the deposit. The interest earned on these is taxable as per the Tax Act 1961. If the tenure is for seven days, the interest earned is 2.5%. If the term is for five years or longer, the interest earned is 6.5%. Any interest earned on these accounts is in Indian Rupees. Moreover, the currency conversion is permissible at the applicable rates to make sure you can repatriate funds abroad after the FD matures.
What documents are required?
If you are an NRI, submit your Indian PAN Card or Form 60, a valid Indian passport, proof of NRI status, overseas and Indian address proof, recent passport-sized photographs, and FEMA declaration for seafarers, along with current work contract and a copy of CDC along with the last page of disembarkation stamp.
NRO FDs come with attractive interest rates, which help you earn higher returns. If you are a Person of Indian Origin, you need to submit the same documents along with a duly filled and signed PIO declaration.
