NRI Fixed Deposit – All About It

What exactly is an NRI Fixed Deposit?
Every individual tends to have a fixed deposit as it serves as security in times of need and emergencies. The same applies to Non-Resident Indian (NRI) fixed deposits. It is opened in one of the banks of India. You will find a number of banks offer various and customised NRI fixed deposit schemes and NRI fixed deposit rates. This further works as a perfect tool for savings. However, you should know as compared to a traditional savings account, NRI fixed deposits are high interest yielding financial products. The interest rates of the fixed deposit are paid until a specified maturity date. Several banks offer NRI fixed deposits at competitive interest rates for different tenures. You can choose the one that meets your needs.

Eligibility for NRI Fixed Deposits:

When talking about NRI fixed deposits, it is wise to know the eligibility criteria for the same:
• The NRI fixed deposit can be opened jointly or individually with other Non-Resident Indians.
• Only a Non-Resident individual of Indian nationality or Indian origin is eligible to open an NRI Fixed deposit account. 

Some Vital Things to Know:

• The interest rate is calculated on a quarterly basis, for all the fixed with tenure of six months and above.
• Interest is calculated at simple rates for the fixed deposits schemes tenure of below six months.
• All the interest earned during the previous quarter is later added to the principal for interest calculation.
• The interest rates for fixed NRI deposits is calculated on every quarterly basis.

Benefits of Investing in NRI Fixed Deposits:

There are great benefits associated with NRI fixed deposits. Some of them include:

• An individual stand to earn great interest rates on the savings than traditional savings account by investing in NRI fixed deposits
• There are certain NRI fixed deposits are non-taxable. Say, for example, a fixed deposit when opened through an NRE account is non-taxable.
• With prior notification, banks offer premature withdrawal of Non-Resident fixed deposit. However, you should know, the deposit is qualified for interest only when it is carried on for a certain period of time as designated by the bank.
• Apart from this, several banks also offer loan against certain NRI fixed deposits. Say, for example, an individual or NRI can get loan against the NRE fixed deposits
• An NRI fixed deposit can be easily renewed on maturity.
• Account like Foreign Currency Non-Resident (FCNR) and Non-Resident Ordinary (NRO) are eligible for tax concession

Now, that you have all the details needed, the next step is getting in touch with any bank and open your NRI fixed deposit account.

NRI Account – All You Should Know

With the number of Indians staying abroad, it has become important for them to have a Non-Resident Indian or NRI account. No matter whether you are residing abroad for business, employment or vocation purpose, it is vital to have an NRI account. When it comes to opening an account, ensure it is authorised by the Reserve Bank of India (RBI). There are great benefits associated with opening an NRI account. One of the greatest benefits is that it helps you earn tax-free interest in India.

Who can Open an NRI Account?

As the name suggests, it is solely made for Non-Resident Indians. In simple terms, individuals who are living abroad for employment should open an NRI account. Furthermore, the account can be maintained either in the rupee, or any currency, like the dollar, pound, euro, sterling and so on. An NRI can easily, maintain, hold, open and maintain various banks accounts with an authorised bank. It makes easier to deal with the foreign exchange. 

Know the Different Types of NRI Accounts

Non-Resident External (NRE):

One of the different types of an NRI bank account is Non-Resident External (NRE). This account type can be opened as current, savings, fixed or even recurring deposit account. Maintained by Indian Rupees (INR), all the deposits of foreign exchange done at NRE account are converted to Indian Rupees by the banks at the buying rate. One of the greatest benefits of NRE account is that the interest earned from this account is completely exempt from the income tax. Furthermore, this account type can be held jointly by more than one NRIs.

Non-Resident Ordinary (NRO):
The funds or money held in Non-Resident Ordinary (NRO) are in Indian Rupees just as NRE account. Furthermore, this account too can be savings, fixed, term or current. A regular bank account too can be converted into an NRO account in case the person becomes an NRI. The main difference between NRO and NRI account is that a person cannot repatriate money from the NRO account. In simple terms, the funds held in the NRO account has to be used for local payment and in Indian Rupees.

Foreign Currency Non-Resident (FCNR)

Another type of NRI account India is Foreign Currency Non-Resident (FCNR). This account can be opened in the form of term deposit. The maturity of this account ranges from one to three years. The currency used in this account is US dollars, Euro, Pounds Sterling and Japanese Yen. All the interest and principal earned on this account can be transferred outside India in the same currency or convertible currency. FCNR account can be opened either jointly with a close relative or survivor basis.

These are the top three types of NRI accounts. Choose the one that best meets your needs.

All You Need to Know About Portfolio Investment Scheme

Non-Resident Indians are always looking for investment options that will prove beneficial in the long run. If you are too one among them, then portfolio investment scheme is an answer for you!

What is Portfolio Investment Scheme?

Portfolio Investment Scheme (PIS) is basically a Scheme of Reserve Bank of India that helps both Non-Resident Indian (NRI) and Overseas Corporate Body (OCB) to sell and purchase shares and convertible debentures of Indian companies on a documented stock exchange. It allows NRIs to invest in the shares of the Indian companies in the secondary market, under non-repatriation and repatriation basis. It covers a number of securities like bonds, stocks and other types of investment vehicles.

You should know, Portfolio Investment Scheme is all about reducing risks than growing returns. An investment can be easily made under both repatriation and non-repartition basis, but then it is important for the NRI to open a Non-Resident Rupee (NRE) and Non-Resident Ordinary Rupee (NRO) with any of the bank. The sale that is acquired of non-repatriable investment should be collected in NRO account only. Furthermore, it is important for the NRI to have a separate bank account, especially for PIS purposes.

Some of the key features of the NRE portfolio investment in India includes:

• When it comes to investments, it is essential for an NRI to have a PIS account. The same account will be used for investments in the secondary market on repartition basis. When it comes to investments on non-repatriation basis, it is vital to do it directly from the NRO savings bank account. Non-Resident Rupee (NRE) PIS account is independent which can be used by NRIs for their needs. All the sale and purchase transactions are well captured and are further reported by your bank to the RBI.

• It is wise to know that NRIs cannot hold more than one PIS account with multiple banks. An NRI should submit all the original sale and purchase contract notes within 24/48 hours of contract execution to the designated bank with whom your PIS account is maintained.

• Another vital aspect an NRI should know is that all the shares that are purchased on the stock exchange under the portfolio investment scheme cannot be in any case should be transferred by way of sale under private arrangement. Furthermore, it should also not be given as a gift to a person who is a resident of India or outside India without prior permission from the RBI.

• NRIs that hold valid PIS permission can trade in convertible debentures and shares of the Indian companies that are recorded on recognised stock exchanges, whether on repatriation or non-repatriation basis.

• Your PIS account can be operated by your friend or relative only when you avail the mandate of power of attorney facility. This makes easier for your relative or friend to conduct the transactions on your behalf.

Get to Know Different NRI Investment Options

Indians who have settled abroad have the right to invest in India. There are a number of safe NRI investment options in India. However, before you invest, it is of paramount importance to understand the tax implications, including both capital gains tax and income tax. One of the major reason why Non-Resident Indians (NRIs) prefer investing in India is that of the higher returns on conversion. NRIs are eager to invest in India considering the fact it is emerging country. Mentioned is the list of the investment options for NRIs:

Direct Equity:

If you are someone who wants higher returns on your investment, then Direct equity is the answer. Investing in stock markets is one of the best options for lucrative NRI investments. However, it is wise that you keep track of the stock market for best results. These markets are sensitive and observing it regularly is of paramount importance. In order to invest in the same, all you need is bank, trading and demat accounts. As you are an NRI investor, you might even have some special services.  You either have the option to invest for a short-term or long-term. The returns depend on the investment and trading strategies you use. You should be prepared for any risks as the prices tend to fluctuate in the stock market.

Mutual Funds

Another NRI investment option is mutual funds. Mutual funds do the work of safeguarding your assets. However, before investing, it is wise to check the asset management’s company’s rules. A lot of mutual funds offer NRIs with Systematic Investment Plan (SIPs) that further allows an investor to break the total investment into either quarterly or monthly investments. It is wise to invest on the repatriable or non-repatriable basis. Have a Non-Resident Rupee (NRE) or Foreign Currency Non-Residential Account (FCNR) account with a bank in India, if you plan to invest on a repatriable basis. In this, the investment money is sent through usual banking channels. While if the investment is made based on non-repatriation, it offers funds from the Non-Resident Ordinary Rupee (NRO) or NRE/FCNR account of the investor. 

Realty Investment

Real estate investment plays a major role in ensuring you get high returns. As compared to direct realty investment, Real Estate Investment Trust (REIT) is more liquid. An NRI can invest in either commercial or residential property, but cannot invest in agricultural lands.

NRE / NRO / FCNR Fixed Deposits
An NRI can easily invest money in a Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account. It is one of the most considered NRI investment in India. The money held in these two accounts is in rupees. An NRI can access this as a term deposit account, a normal savings account or even current account. You can even consider investing in FCNR account in which the money is deposited in foreign currency.

Steps to Open an NRI Account from Overseas

When it comes to banking, there are innumerable options for every kind. An Indian resident staying abroad can easily rely on Non-Resident Indian or NRI banking. It is a great way to ensure your banking needs are well taken care of despite staying overseas. An NRI account is definitely a handy tool. When it comes to opening an NRI account, it becomes difficult to do so as the NRI requires visiting the branch for the same to get done with the account opening formalities. To make it easier, NRIs now can easily open their account at the convenience of their homes by following these steps:

Download the Form:

The first step towards opening your NRI account is by downloading the form from the bank you want. These are offered by a number of banks offering NRI services, and hence you are advised to read the benefits offered with the NRI account as it tends to differ from one bank to another. There are some banks who also offers the option of filling up the form online itself.

Know the Documents Needed:

Before the account is opened, an NRI has to submit the necessary documents. It majorly includes approved the proof of identity, proof of address, proof of NRI or PIO status. It should be in the form of passport copies with a valid visa or PIO card.

Additional KYC:

There are some banks in which an applicant may have to fill up additional KYC format in order to disclose the tax residency status and all the other related under the CRS and FATCA requirement. This further requires the applicant to submit additional documents and proofs along with the account opening form.

Attestation:

It is vital the documents you submit are attested by the Indian Consulate or overseas bank or should be notarized by a foreign notary. Apart from this, an applicant also has to provide additional proof with self-attestation.

Dispatch:

To ensure the form and the other documents reach to the bank safely, it is of paramount importance to dispatch it using the right address. In some countries, banks also offer PO Box service in which NRI can easily drop the application in the post box with the right PO box number.

Certain Points to Remember:

To get the best NRI services in India, you can get in touch with the banks to get more details. The experts are glad to be of your help in more than one way. The experts offer all the assistance needed to complete the account opening formalities.

How to make your trips abroad hassle free today?

When it comes to travelling abroad, no matter the purpose, there are several factors you need to take into consideration. Amongst the various factors, your financial investment and expenditures will be taken into consideration. While there are several options you can consider for these purposes, the travel card is one option you can consider.

Travel cards as the name suggests is a form of banking card that offers prepaid facilities providing you with a foreign currency of your choice. You can easily load a fixed amount of funds in your local currency on the card and withdraw or make transactions in a foreign currency. You can estimate your spending with these cards and invest the amount that satisfies your requirements. In this way, it makes your overseas trip hassle free and effective.

If you are planning to use the travel card for any of your upcoming trips, here are a few tip you can take into consideration:

• Before purchasing a travel card, ensure that you have sufficient knowledge about it. For example, you may not be able to use the card in certain countries to pay fuel bills or tools due to security issues. In this case, you should ensure that you have sufficient cash on your hand.

• As soon as you get the card, remember to change the default PIN before you travel abroad to prevent any misuse. Additionally, with a changed PIN you can also avoid the chance of getting a rejection overseas especially at ATM counters.

• If you need to withdraw funds, be aware of the withdrawal charges. In certain places or countries, there can be an extra fee on transactions. Look out for travel cards that offer you free withdrawals around the world to avoid these extra fees.

• Keep track of your available balance on your travel card. You can do this through the ATM, email statements or SMS updates. You can even get a mobile application downloaded to track all your transactions.

• Avoid using your travel cards for security deposits, especially if you need to clear up your hotel bills. In some cases, the balance amount in the travel card may get blocked for a certain period.

• Always check the current conversion value before proceeding with any transaction. This will help you gauge how much funds you will be actually spending with each transaction on your card

• If you have the option to pay in the local currency, avail it. In the event you don’t take advantage, your retailer may convert it into foreign currency.

• In the event, you lose your card, or it is stolen; you must block your travel cards immediately. Most cards come with a  replacement one, so you can always use this card as a backup.

• If you are planning to use this card for a long period, over different travel trips, ensure that you are aware of the expiry date of the card.

What are the different factors that contribute to the changes in forex rates?

The forex exchange market is a global market where the trading of currencies is done all throughout the day and night. As an investor in this market, the rate of which these currencies are exchanged is very important. This is because the currency is used to determine the economic status or growth of that particular country, in comparison to other countries. As these features change, so does the rate of the currency.

This rate is normally monitored and constantly evaluated, as it is a key to determine the factor for the country’s economic stability. As mentioned previously, forex investors and those who frequently send foreign funds abroad would need to constantly screen the exchange rate so as to know the appropriate time to make a transfer or transactions.
Given below are some critical factors that play an important role in determining the rise and fall of the exchange rate. This will go a long way to help you understand the suitable time to transfer or receive funds:

Inflation rates in the market: The variations in the market inflation rates is one of the critical aspects affecting the exchange rate of the country.  Country’s that possess a low inflation rate normally have a stronger value of currency, as compared to countries that have a high inflation rate. However, this is only applicable if the other factors are held constant. If the inflation rate is low, goods and services tend to appreciate at a slow rate as compared to countries that have a high inflation rate. If the low inflation rates are maintained for a longer period of time, the value of the currency appreciates steadily.

Interest rate charges: Forex exchange rates, interest rates and rates of inflation are always interrelated while playing a big role in determining the stability of the market. Any changes in the interest rate will affect the value of the currency and in turn, the exchange rate. Any increase in the interest rate will increase the value of the forex currency. This normally occurs, when the borrowers are charged a higher interest and in turn, attracts a foreign capital. This causes the exchange rates to go up.

Debt accrued by the government: Any unpaid dues by the central government are always considered as a civic debt and furthermore a liability. The bigger the debt, the less likely the government will negotiate to get a better foreign capital. This in turn, results in the increased inflation in the country. When this occurs, investors tend to trade bonds when the debts are too high. Consequently, this will always lead to the fall in the value of the current exchange rate.