Banking for non-resident Indians is different than banking for Indians. If you wish to manage your finances in India, you need to open a Non-Resident External or NRE or Non-Resident Ordinary or NRO Account. Moreover, you can also create Fixed Deposits of the sums parked in your NRI Accounts. The NRI Fixed Deposit can help you earn higher returns on your savings and are regarded as safe.
As an NRI, you can open three FDs:
NRE is where the cash is deposited in foreign currency and converted to INR. After depositing enough money, you open an NRE Deposit. This is possible online and offline. The tenure and interest rates on domestic FDs differ from that of NRE FDs, and you can earn high-interest rates. Also, no charges are levied on this FD, which is fully repatriable.
NRO Fixed Deposit
NRO Accounts are rupee-only accounts and ideal for NRIs with income sources and investments in India. The savings parked here can be converted into NRO Fixed Deposit. Typically, the bank provides the same interest rates on NRO FDs as domestic FDs. Also, the principal amount and interest earned here are subject to TDS and other applicable taxes.
FCNR Fixed Deposits
FCNR stands for Foreign Currency Non-Resident or FCNR Deposit. It is essentially a deposit and not an account as such. The FCNR Deposit should be opened separately and, unlike the NRE or NRO FD, you can open them in any currency you wish. The interest pay-out is also done in foreign currencies, and you can open FDs of some major international currencies, including USD, GBP, EUR, JPY, AUD, CAD, NZD, SGD, SEK, DKK, and ‘SFr.
You can open any of these deposits online on a laptop or mobile. Alternatively, make sure you have the following documents handy:
- Valid PAN or Form 60
- Indian passport copy
- Documents proving your NRI status – work or residence permit
- Recent passport-size photograph
- Address proofs – Indian and overseas
- Valid PIO or other PIO status cards along with a completed PIO declaration form
- Your FEMA declaration along with ongoing work contract or a copy of CDC along with the final pages that mention disembarkation stamp
Opening any of the mentioned NRI FD is relatively easy. You can also create the FDs through your NRI Accounts. However, you need to check the minimum deposit amount and the terms for FD maintenance and premature withdrawal.