Investing in India will fetch higher returns than investing the same amount in your country of residence abroad. Not only is the interest rate for the FCNR deposit account higher, but the interest earned is also exempt from tax in India! You can also fully repatriate the deposit amount – principal and interest – in your account in the country of residence with no charges or tax. With hassle-free NRI banking by banks like IndusInd Bank, get in touch to start earning more on your funds!With the recent fall in the global equity, and fixed income market, coupled with the rising inflation and the Russia-Ukraine war, many countries are headed towards an economic slowdown. In such times, having a safety net makes sense. Therefore, NRIs should also be prudent in looking for safer investment options and ways to earn extra through their investments.
One of the ways to earn more or get good returns on foreign currency is through the FCNR (foreign currency non-resident) deposits for NRIs. One of the most underrated forms of investment by NRIs is the FCNR deposits. NRIs have plenty of investment options in India, offering varied benefits.
Read on to learn how NRIs can earn high returns on FCNR deposits and how they can be a better investment option.
Know more about FCNR deposit
A foreign currency non-resident deposit or FCNR deposit is operated by NRIs and OCIs with the option to deposit their savings in respective foreign currency in India for a fixed tenure, ranging from 1 to 5 years. Any interest earned on an FCNR deposit is exempt from taxation in India – making it one of the most attractive investment options. Since the deposit is in foreign currency, the investment is safe from any currency exchange fluctuation risk. The funds – principal and interest – are fully repatriable as well. NRIs can open FCNR deposit accounts in the following currencies with IndusInd Bank at attractive interest rates – USD, GBP, EUR, CAD, JPY, and AUD. So, NRIs from across the globe including US, UK, Germany, Canada, Singapore, Australia, Qatar, UAE, Bahrain, Oman, and Japan can easily open an FCNR deposit account in India in the above-mentioned foreign currencies.
Why FCNR is better for NRIs?
Most NRIs keep their salaries in their local banks at low-interest rates, usually at sub 1%. On the other hand, Indian banks, such as IndusInd Bank, offer FCNR deposit accounts at higher interest rates. Since FCNR deposit accounts are maintained in foreign currency, they yield higher returns than the resident bank account of NRIs in their home country. Furthermore, since the deposit is made in foreign currencies, there is also no risk of currency fluctuation exchange. Note that although the interest earned on FCNR deposits is exempt from tax in India, resident country taxation might still apply. Banks like IndusInd Bank provide a 5.70% interest rate on USD FCNR deposits. The interest rate varies as per tenure. In all cases, the interest is compounded on a half-yearly basis.
Standard documentation
If you are an NRI looking to park your funds to get high returns in India, consider opening an NRE (non-resident external)/NRO (non-resident ordinary) account with your bank first and also open an FCNR deposit account. Other than this, you will need basic documentation to open this account – passport, proof of the NRI status, proof of address, and any other KYC documentation.
