India’s financial market offers a host of investment options ranging from high risk to low risk options. Stock market, mutual funds and fixed deposit are just some of the many investment opportunities currently available. NRIs investing in the Indian market are doing so under the regulations of central financial institution. Investments linked to market will always involve risks, and the investor can suffer huge losses due to fluctuations. Fixed deposit is an alternative investment option which will bring in high returns while involving very low risk.
Fixed deposit is one of the safest and flexible investment options in the Indian investment market. There are two types of fixed deposits- cumulative and non-cumulative. In cumulative deposits, interest is calculated quarterly or annually but is paid out only at the end of the maturity period. In non-cumulative deposits, the interest is calculated annually, half-yearly, quarterly or monthly and paid out to the investor as per the same timelines.
The type of fixed deposit scheme that an NRI will avail depends on the maturity amount on disbursement. Interest rates vary in different FD schemes; for instance, interest rates are high for cumulative fixed deposits compared to non-cumulative ones. NRIs can easily calculate the maturity amount using an NRI FD interest calculator provided by most NBFCs and Financial institutions. NRIs can easily plan their finances with the help of FD calculator.
How to use the NRI fixed deposit interest calculator
- Choose customer type among available options including new customer/existing loan customer/senior citizen.
- Select the type of fixed deposit you want to invest in (cumulative or non-cumulative.)
- Input the deposit amount and the tenor of deposit.
- After entering all the above information, the user can see the interest and total amount that he/she will get at the end of maturity period.
Benefits available for NRIs
Apart from NRI FD Interest calculator, some NBFCs offer a host of benefits to NRIs like –
- They can avail an interest rate of up to 8.35% on a fixed deposit of 12 months to 36 months.
- A high interest of 0.35% in addition to the regular fixed deposit rates for NRIs who are senior citizens.
- Some NBFCs like Bajaj Finance, offer the benefit of multiple deposits with a single cheque.
- Online application and account management.
- At the time of investment, NRIs can avail for auto renewal of their fixed deposit if they wish to.
- Tax benefits can be claimed on NRI fixed deposits under double tax avoidance agreement (DTAA).
Facts that NRIs should keep in mind before investing
- They can only invest money through NRO(non-resident ordinary) or NRE(Non resident external) accounts
- They can only make payments through cheque or an RIGS/NEFT from NRO bank account.
- If the investment from FDs is less than Rs. 50 Lakh, tax is deducted at a rate of 31.20%. If the investment is more than Rs. 50 lakh but less than Rs. 1 Crore, tax will be deducted at a rate of 34.32%. If the annual income from deposits is more than Rs. 1 Crore, then a 35.88% TDS rate will be applicable.
In fixed deposits, an investor deposits a substantial initial amount with the financial institution against interest rates that generate returns on the invested amount. Hence, they need to choose a NBFC which has a high stability and credibility rating with CRISIL’s FAAA/stable rating and ICRA’s MAAA (stable)rating like Bajaj Finance so that their principal sum is never at risk. Here is a guide to know if your fixed deposit investment is safe.
Fixed deposits are a safe investment option for NRIs. A Bajaj Finance FD can aid someone to be financially independent. It is suitable for any individual making their first investments to build their wealth as well as for senior citizens looking for a regular source of income to meet their daily needs.