Can NRI Open Fixed Deposit in India?

Fixed Deposits (FDs)
1

I am an NRI. I want to know can NRI invest in FD in India?

2

Yes, NRIs can create Fixed Deposit accounts in India and earn interest from them. Foreign Exchange Management Act permits this and you will get 3 main options in this case:

NRE, NRO and FCNR (B) deposits

  • Let me explain quickly. If you open an NRE account, you can park your foreign earnings in Indian currency. The interest here is tax-free and you can freely repatriate both principal and interest. So it’s quite flexible.
  • You can create an NRO account and invest your income generated in India from pension, rent, etc. You can repatriate the FD amount equivalent to 1 million USD by paying the applicable Income Tax.
  • Then there’s the FCNR (B) account, where you invest directly in foreign currencies like USD, GBP, AUD or Euro. This one shields your money from currency fluctuations and is also tax-free.

Just keep in mind, for NRO accounts, the tax on repatriating funds can range between 31.2% and 42.74%. And for FCNR (B), it is always a good idea to check with your bank if they support the currency you want.