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Nre Fixed Deposits: How To Make The Most Of This Tax Free Deposit

By Author: Neha Sharma
Total Articles: 1215

Plenty of individuals are travelling abroad and settling down for plenty of reasons. However, if such individuals possess any financial investments, they would either be required to withdraw it, or convert it into NRI account held funds. Amongst all the available options, the most favourable one is the NRE account and its fixed deposit.

The NRE fixed deposits are similar to regular term deposits which are designed for the financial needs of the NRI’s. Plenty of banking institutes offer this fixed deposits through the opening of the NRE account. unlike the other NRI accounts, this account enjoys tax free benefits. So how can you make the most of this account for your use? Here is how one can do so:

Eligibility criteria for NRE fixed deposits:

In order to invest in this fixed deposit, you must first open a NRE account. In order to open this account, you must either be an NRI or be a person of Indian Origin. In addition to this, you will also need to submit certain documents pertaining to the opening of this account.


Features of fixed deposit of the NRE account:

The following are the features of the fixed deposit of the NRE account and how you can use it to your advantage:

• Most banks offer an 8% interest on the termed deposit. However, the rate can vary, depends on the banking institute. As far as taxation on these deposits are concerned, as mentioned earlier, the interest earned on an NRE deposit is not taxable in India.
• The NRE fixed deposit has a flexible tenure that ranges from 1 year to 10 years.
• These fixed deposits can be terminated prematurely at any time. However, a fixed penalty will be charged for the premature withdrawal. This charge will differ from bank to bank.
• The funds that are invested in this account is always invested in INR. This also includes income that is earned outside India.
• Plenty of banks offer the overdraft facility on the NRE deposits. Depending on the banking institute, ne can get up to 90% overdraft.
• Alternatively, one can also take a loan against the NRE deposits. The amount that one can take against this deposit will differ on the banking institute.
• NRE accounts and consecutively, the NRE fixed deposits can be held in a joint account with another NRI.
• Some banks also offer an auto renewal feature. Through this feature, the termed deposit will renew itself at maturity.


Based on these features, you can easily use it to your advantage. Any investment invested in this account can easily earn high interest rates. Apart from its high return on investment, one can easily use the funds of this termed deposit anytime you require it. Additionally, the nomination facility ensures that in the event of your death, others can easily access your with ease.

Author Bio :- Neha Sharma is a finance student who loves to write during her spare time. She has considerable information about the nre fixed deposits. Through her work, she has provided valuable information on how you can make the most of this tax free deposit to your advantage.

Total Views: 83Word Count: 519See All articles From Author

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