- Date : 11/09/2023
- Read: 3 mins
NRO fixed deposits are a reliable and better investment option for NRIs since it offers higher interest rates and stable returns in India.
The Non-Resident Ordinary (NRO) fixed deposit stands as a premier NRI investment choice in India. These secure deposits, regulated by the Reserve Bank of India (RBI), yield interest rates ranging from 2.5% to 7%. Awareness of its taxable nature is crucial to make informed investment decisions. By opting for NRO FDs, you're not just choosing a financial avenue, but embarking on a journey of astute fund growth. Your money deserves nothing less!
Highlights:
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NRO fixed deposits are a safe investment option for NRIs, as they are regulated by RBI.
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NRO FDs can be of any duration ranging from 1 week to 10 years, ensuring that NRIs earn stable returns with higher interest rates.
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NRO fixed deposit interest rates are higher, ranging from 2.5% to 7% offered by many banks in India.
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Depositing earnings in NRO accounts will help NRIs fulfil the financial commitments of their families in India.
Also Read: Is investing in FDs a better option for high returns?
How do NRIs benefit from NRO FDs in India?
The following are the benefits that make NRO Fixed Deposit a better investment option for NRI:
Repatriable funds
Interest earned on NRO account funds is subject to taxation. However, NRIs can simplify fund repatriation by completing a repatriation form. This enables seamless money transfer back to their home country, ensuring financial convenience.
Attractive interest rates
NRO fixed deposits offer attractive interest rates, typically ranging from 2.5% to 7% (varies from bank to bank). What's more, these deposits often come with special rates for remittances, adding to their appeal.
Tax benefits
Five-year long-time NRO FDs can get tax deductions under section 80C of the Income Tax Act. To get tax benefit, NRI must earn income from dividends, salary, or rent.
Avail DTAA benefits
The NRO deposit’s interest is subject to Tax deducted at Source (TDS). The TDS rate depends on the total interest of the NRO deposit. To reduce this tax rate, one can avail the Double Taxation Avoidance Agreement (DTAA) option.
Also Read: NRIs need this personal finance checklist
What are the NRO FD rates in 2023?
The takeaway
In conclusion, NRO FDs provide NRIs with a reliable opportunity to secure stable returns in India. With a modest minimum investment ranging from Rs. 25,000 to Rs. 50,000, these accounts can be opened individually or jointly, granting flexibility. While certain banks permit early withdrawals with associated penalties, it's vital to factor in these considerations, along with potential tax implications, before embracing the benefits of NRO FDs.
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Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.
References:
financialexpress.com
hdfcbank.com
