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2 mins Read | 8 Months Ago

NRE Fixed Deposit Account: Features, Benefits and Required Documents

NRE Fixed Deposit Account - Features, Benefits and Documents Required to Open NRE FD Account

NRE Fixed Deposits are popular among NRI (Non Resident Indian) & PIO (Person of Indian Origin) investors looking for high returns. Investors can open an NRE Fixed Deposit in Indian currency through their NRE Account and enjoy attractive interest rates along with a range of other benefits.

Prominent Features of NRE Fixed Deposit Accounts:

  • Funds can be deposited in Indian currency

  • Returns can be determined using an NRE FD Calculator

  • Auto-renewal facility is available for NRE FDs and the maturity amount gets reinvested automatically

  • Bank enables investors to take Loans against NRE Fixed Deposits

  • A nomination facility is available for NRE FDs

  • Investors can open Joint NRE FD Accounts

  • Investors can make premature withdrawals from an NRE Fixed Deposit for financial emergencies.

Benefits of NRE Fixed Deposits

Repatriate Funds Back to the Country of Residence

NRE Fixed Deposits enable you to repatriate the principal sum as well as the interest earned, to a Bank Account in your country of residence. Indian currency conversion rates will apply to the funds.

Receive Guaranteed Returns

NRE FDs offer guaranteed high returns to maximise wealth. You can enjoy competitive NRE Fixed Deposit Rates of more than <5>% and the interest is be compounded quarterly.

Pay Zero Tax

NRE FDs support Tax exemption and investors do not have to pay Tax on the principal amount or the interest earned. Despite the high returns, you are exempted from the Tax burden.

Pick a Convenient Tenure

While opening an NRE Fixed Deposit Account, you can pick a convenient tenure between 1 to 10 years. NRE FD Interest Rate will depend on the tenure and longer Fixed Deposit tenures will reward you with higher interest rates.

Documents Required to Open NRE Fixed Deposits

NRIs as well as PIOs can easily open NRE Fixed Deposits.

Documents required by NRIs to open an NRE FD:

  • Form 60 or PAN Card

  • Valid Passport copy

  • Recent passport-size photograph

  • NRI status proof (Employment/Residence Visa or Work/Residence permit)

  • Indian and overseas address proof.

Documents required by PIOs to open an NRE FD:

  • Form 60 or PAN Card

  • Valid Passport copy

  • Recent passport-size photograph

  • PIO status proof (valid OCI or PIO Card)

  • Indian and overseas address proof

  • Duly filled and signed PIO declaration.

NRIs and PIOs can easily scan and upload documents on the bank or financial institution’s portal while creating an NRE FD. An NRE FD is highly beneficial for growing your foreign currency savings with tax-free interest. The funds from NRE Fixed Deposits are eligible for repatriation. Moreover, both the principal and interest amounts on NRE FDs are tax-free. Open your NRE Fixed Deposit now!

NRE Fixed Deposit FAQs

1. What will happen if I don’t withdraw my NRE FD funds upon maturity?

If you don’t wish to withdraw the NRE FD funds upon maturity, the feature of automatic reinvestment is available. If you have provided auto-renewal instructions, the matured amount will get reinvested for the same tenure. The applicable interest in case of auto-renewal will be the prevailing rate on the date of maturity. But in case you haven’t opted for the auto-renewal facility, the amount will be transferred to your NRE Savings Account.

2. Can I open Joint NRE Fixed Deposit Accounts?

Investors can open Joint NRE Fixed Deposit Accounts. The Joint Account should be opened with another NRI.

3. Can I break NRE Fixed Deposits before their maturity?

You can break NRE Fixed Deposits before their maturity date. However, NRE Fixed Deposits must remain invested for at least a year, to be eligible for interest payments. Interest will be calculated at the rate applicable for the period for which the deposit was held with the bank or the contracted rate of the deposit, whichever is lower.

4. What is the tenure of NRE Fixed Deposits?

NRE Fixed Deposits come with a tenure of 1 year to 10 years. Investors can choose a tenure according to their convenience. However, a longer NRE FD tenure will guarantee higher returns.

5. What is the Tax applicable on NRE Fixed Deposits?

As per RBI guidelines, no Tax is levied on NRE Fixed Deposits. Investors can enjoy Tax benefits on the principal as well as the interest earned from NRE FDs.

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