The NRI Guide to Fixed Deposits in India

As per data from the financial year 2018, fixed deposits accounted for 57.7% of the basic statistical return of Indian financial institutions. This high share of statistical return from fixed deposits indicates that Indians are especially fond of this investment option. A crucial reason for Indians favouring fixed deposit accounts is due to the security that is assured with such investments.

Apart from FDs, 32.9% deposits with financial institutions were from savings accounts. In this case, a crucial advantage is that of easy accessibility to the funds. Any individual keeping their finances in a savings account can access the money at any time, even with access to ATMs. 

Additionally, NRI savings accounts offered by financial institutions also offer an interest since the money is kept at their disposal for circulation. However, they should also consider saving in a fixed deposit account since this offers them high returns. 

In all cases, NRIs have to open specific types of accounts, which suit their needs. These are mentioned in details below –

    • Non-Resident Ordinary (NRO): These are the most common of the accounts available for NRIs. Deposits in Indian currency that were generated within India can be invested in such FD accounts which usually offer high returns.
    • Non-Resident External (NRE): These NRI savings accounts allow individuals to save their money in Indian currency. The tax benefits and interests on these accounts are very high.

 

  • Foreign Currency Non-Repatriable (FCNR): These types of accounts allow individuals to save their money in foreign currency.
  • Resident Foreign Currency (RFC): These accounts are especially helpful for those who intend to return to India since they can deposit in foreign currency and retrieve the money in India.

 

Eligibility and document requirements

For resident citizens of the country, it is extremely easy to invest in fixed deposit accounts. In case of NRI individuals, applying for an NRO account is the first step. Investors can choose from different types of saving accounts, although it is wise to invest in fixed deposits for assured returns. 

Offered for tenors ranging between 12 and 36 months, the following are eligible for an NRO account –

  • Non-Resident Indians.
  • Overseas Citizens of India.
  • Person of Indian Origin.

The documents required to open a fixed deposit account for an NRI individual are covered underneath.

  • PAN card.
  • KYC documents.
  • Latest photographs of the investor.

In case a partnership firm or private company of Indian origin intends to invest in NRI savings accounts like fixed deposits, they have to produce some additional documents as well. 

For partnership firms owned by NRIs, the following documents are a must –

  • ID proof of authorised signatories.
  • Specimen signatures of authorised signatories.
  • Certificate of Registration.

In the case of private companies owned by NRI applying for NRI savings accounts, the underneath documents must be arranged.

  • Certificate of Incorporation.
  • Memorandum and Articles of Association.
  • Board Resolution.
  • ID proofs of authorised signatories.

The application process for these accounts is fairly simple. It is discussed in the following section.

Application procedure

It is advisable to arrange all the required documents beforehand so that the application procedure can be completed with ease. One of the best schemes to save money, individuals investing in a fixed deposit account should follow the following steps.

  1. Numerous NBFCs like Bajaj Finance and others offer these accounts. NRI applicants should compare different interest rates and choose the correct financial institution.
  2. The online portal of financial institution offers easy access to the application form of. Every detail must be filled, followed by careful double-checking.
  3. Applicants must upload all relevant documents. They may have to submit additional documents other than the ones mentioned above.
  4. The last step is the payment of cash. In case of NRIs or any organisation owned by NRIs, only online or cheque payment options are allowed. Demand drafts and similar payment options are not accepted.

NRIs considering opening an FD account can also explore options like joint accounts. They can open a fixed deposit account without the trouble of opening an NRO account as long as they open an account with an Indian residing in the country.

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