Can NRIs Invest in FD in India? Avoid These 5 Mistakes

A Fixed Deposits (FD) is  a popular investment option for non-resident Indians (NRIs) looking to earn a fixed return on their money. Along with the advantage of a guaranteed interest rate, they offer the stability and security of investing with a bank or financial institution.

However, there are a few common mistakes NRIs must avoid while investing to make the most of it. Let's understand these in detail in this article

Not having a financial goal
 

Investment in fixed deposits must be part of a larger financial plan. An NRI may treat an FD as an amount parked in India to earn a higher interest rate. However, keeping it part of a financial goal makes it more useful. It will mature at the right time and can be used better.

Ignoring liquidity needs
 

Investments in FD must be made keeping immediate and short-term financial needs in mind. Otherwise, one may be forced to withdraw prematurely, which might attract a penalty.

If you have opened a fixed deposit with IDFC FIRST Bank, you will be charged a nominal amount as a premature closure penalty. Moreover, you can select IDFC FIRST Bank NRI Fixed Deposits across a diverse range of lock-in periods ranging from seven days (for NRO FD) to 10 years to manage your liquidity needs.

Opening a single FD
 

When investing in fixed deposits with a financial goal in mind, an investor would want them to mature as per specific goals. To achieve this, spread funds across different NRI FD amounts – by not investing the entire fund on the same day and/or by investing for different deposit periods. Don't go for the period with the highest interest rate, as you might overlook your liquidity needs and financial goals.

Not comparing interest rates
 

Compare the FD interest rates offered by different banks and financial institutions online and choose what is most suitable per your financial goals.

For example, IDFC FIRST Bank NRI fixed deposits include options like Non-Resident External (NRE), Non-Resident Ordinary (NRO), and Foreign Currency Non-Resident (FCNR deposit) accounts. Compare different banks and FD types before making a selection.

Failing to track the debt market
 

The interest rate changes made by the Reserve Bank of India have a bearing on the FD interest rate. Therefore, it is crucial to keep an eye on such policy decisions and invest accordingly. Also, track the inflation rate regularly, as, during times of high inflation, the real income from fixed investments such as FDs would be low.

For your FD investment with IDFC FIRST Bank, you can consult your Relationship Manager to diversify across other inflation-beating alternatives.

In conclusion
 

IDFC FIRST Bank NRI FDs offer attractive interest rates across its range of NRE, NRO, and FCNR products. Furthermore, its digitised process makes it easier to choose the interest type, the payout type, customise FD renewal instructions, and remit the funds in foreign currency without visiting a bank.

As an NRI, you can also enjoy tax exemption on the earnings of your FCNR and NRE deposits. Why wait? Open your NRI FD with IDFC FIRST Bank today!

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.