Fixed deposits are considered to be one of the traditional instruments of investment and one of the potent means of generating risk-free and steady returns. Consequently, it attracts the attention of both resident and NRI investors alike.
Further, it is the NRI FD rates and a list of other features that come with such an investment option that draws in more number of investors each year. However, it must be noted that the benefits extended under NRI fixed deposit accounts may be different from what is offered under regular FDs.
To elaborate, here’s a list of benefits of NRI Fixed Deposits –
Easy application process
The application process to set out to apply for an NRI fixed deposit is simple and hassle-free. For instance, most financial institutions allow individuals to open an NRI FD account both online or offline. Further, some even extend the facility to ‘request a call’, by filling in a few basic details. In such a method, the institutions get in touch with the interested applicant and streamline the process accordingly.
Most NBFCs extend substantial NRI FD rates to both new and existing customers. Additionally, such an investment option further offers higher rates to senior citizens on the income generated in India. This makes NRI FD a fruitful investment option. Consequently, NRIs who wish to open an FD in India must look for prominent NBFCs like Bajaj Finance that extend substantial interest rates along with other attractive benefits.
Opportunity to co-apply
Fixed deposit accounts allow individuals to apply jointly. The co-applicant can either be an NRI or a residing Indian citizen. This makes the process of transferring money from NRO accounts more convenient and simple. Investors should make it a point to learn about the documents required to open a fixed deposit account jointly to be better equipped.
Most NBFCs extend the facility to deposits into multiple fixed deposit accounts at a go through a cheque. This makes the entire process quite simple and convenient.
Income tax benefits
Though the income earned on NRI FD attracts TDS, FD account holders can reduce its burden significantly. As a means to achieve it, they can claim tax deductions under the current Double Tax Avoidance Agreement or DTAA. This would directly help NRI FD investors generate higher earnings on their deposits and increase their savings significantly.
Since this fixed deposit is not influenced by the market fluctuations, individuals avail assured returns on their deposits. Since NRI FD rates remain unaffected during the market volatility, it assures a steady flow of income.
In turn, it makes this investment option a favorable one for risk-averse and conservative investors in general. By using a fixed deposit calculator, investors will be able to assess the returns on their deposits.
Tenor and renewal
Most leading NBFCs permit NRI FD account holders to opt for a tenor depending on their financial goals or immediate requirements. For instance, an NRI FD comes with a tenor between 12 months and 3 years. Hence, it is suitable for those investors who are looking for short term investment plans that are safe and generate stable returns. Additionally, the fact that some financial institutions permit their customers to renew their deposit automatically is an added advantage.
Minimum initial deposit
NRIs only have to invest a mere Rs.25,000 when opening a fixed deposits account. They can invest up to Rs.5 crore in a single FD.
Regardless, intending FD account holders should not base their decision entirely on the benefits. They should also take into account the various conditions they have to fulfill to avail the same. Further, they should compare the NRI FD rates, tenor and other crucial features before applying for one.
Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at HighlightStory