NRO Fixed Deposit FAQs

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Financial independence is something you would actively strive for. Investing can help you achieve it

Financial independence is something you would actively strive for. Investing can help you achieve it. Making investments ensures you have enough money to take care of yourself without being dependent on anyone else, even during hardships. It enables you to achieve your goals in a systematic manner and assures financial security for loved ones regardless of anything,

Today, there are innumerable investment options. Hence, it is crucial you carefully consider which option is suitable for you. NRI Fixed Deposit is a viable investment option to explore. It possesses a decent return earning potential and involves minimal risk. NRI FDs are of three main types: Non-Resident Ordinary, Non-Resident External, and Foreign Currency Non-Resident Deposit. Each deposit is suitable for investment for specific objectives.

If your objective is to secure and grow your Indian Rupee income, you can consider investing in an NRO Fixed Deposit. This article answers FAQs about the NRO FD.

Why invest in an NRO FD?

While you move overseas to build a career and life there, you may continue to hold income-generating investments and assets in India. You should consider opening an NRO Account to park your INR income securely. Furthermore, you should consider investing in an NRO FD, as it would earn you a competitive interest rate on your INR income, keeping it growing.

You can use the NRO FD interest income to care for your loved ones living in India or to manage your expenses during your visit.

What interest rate you earn on an NRO FD?

NRO FD interest rates differ from one bank to another. Learn about various bank interest rate offerings, compare them, and invest with a bank offering the most competitive NRO FD rates. This will help you maximise your interest earnings.

What is the minimum and maximum tenure for which you can invest in an NRO FD?

You can invest in NRO FD for a minimum of one year and a maximum of 10 years. This means you can invest in the FD to meet any short, mid, and long-term goals. Consider your investment objectives and obligations to determine a suitable investment tenure. Ideally, you should invest for a longer tenure to benefit significantly from the power of compounding.

Is it possible to make a premature withdrawal from an NRO FD?

Ideally, you should stay invested in the NRO FD until its tenure is completed. However, for any given reason, you cannot continue with the investment, you can opt for a premature withdrawal. You are penalised and lose out on significant interest earnings on premature withdrawal. This translates to an immense financial loss.

Consider applying for a Loan against the NRO Deposit to meet your financial requirement instead of opting for a premature withdrawal. You can obtain up to 80-90% of the FD value as a Loan. You can get the Loan at a competitive interest rate for a flexible tenure which makes  your repayment affordable.