Fixed Deposit Is the Best Investment for NRIs in India

Fixed Deposit

Most Non-Resident Indians (NRIs) maintain Non-Resident Ordinary (NRO) banks accounts in India to hold their foreign currency in Indian rupees. NRO acts like a savings account and enables NRIs to manage the income they earn in India, make domestic financial transactions or use for local spends.

NRIs park a hefty amount in their NRO accounts, but the money lies idle and earns meagre returns. Hence, NRIs should consider investing in a NRI fixed deposit account to grow their savings.

Here are more reasons why FDs make the best NRI investments in India:

Handsome and safe returns

An NRI fixed deposit offers assured and betters returns than other investment, especially if you are looking for short-term investments. Moreover, it is a very safe investment because both principal and interest are not vulnerable to market fluctuations.

There are many FD options in the market, but you should look for one that not only offers the best interest rate but also offers the highest safety of your money. Bajaj Finance FD, for instance, offers 8.05%, one of the highest NRI FD interest rate in India. Moreover, it is the only NBFC in India that has been accredited with the international rating of ‘BBB’ by S&P Global Rating. It also has the highest credit rating of FAAA/Stable, a rare achievement for any NBFC in India.

Maximization of returns

NRIs can maximize returns on FD further by reinvesting the principal and interest amount on maturity instead of withdrawing it through periodic payouts or on maturity. This way, your investment gets more time to grow and accumulate corpus. This is called cumulative FD option. NRIs can avail auto-renewal facility at the time of filling the application form so that FD gets renewed automatically on its own and they can also earn an additional interest rate benefit upon auto renewal.

The returns on FD can also be maximized through multiple-deposit facility under which NRIs can invest in several FDs with a single payment. The advantage of this facility is that NRIs can choose varying tenors, interest rates, and amount according to their financial goals. Bajaj Finance offers an online fixed calculator through which you can determine the maturity amount and plan your investments accordingly through multi deposit facility.

Timely periodic payouts

One more advantage that works in the favour of FDs is high liquidity factor. NRIs can withdraw interest on monthly, quarterly, half-yearly and yearly basis, as the need may be. Premature withdrawal is also possible, albeit with a small amount of penalty. If you are an NRI senior citizen, periodic payouts serve a very useful feature.

Tax benefits

Interest on NRI accounts is subject to TDS. However, TDS on FD interest rate can be offset by claiming tax benefit under the Double Tax Avoidance Agreement (DTAA). Under this agreement, NRIs can claim either a tax credit or an exemption. This way, they can reduce their tax liability and even have an option to repatriate the earnings back to their country of residence after the tax payment.

FDs are the best financial instrument for NRIs to save money earned abroad, earn a high interest rate and build a sizeable corpus.