Non-resident Indians (NRIs) invest their savings in Fixed Deposit (FD) Accounts to secure their financial future and earn steady investment returns. NRIs can open different FD Accounts, such as NRE, NRO, and FCNR. Managing your NRI Fixed Deposit portfolio wisely is essential to make the most of these investments. 

Here are some simple tips to help you do just that.

1.      Understand the different account types

NRI Fixed Deposit is mainly categorised into -

●       NRE (Non-Resident External) Account: NRE FDs are suitable for keeping your foreign earnings in India. The principal and interest in these accounts are fully repatriable, meaning you can transfer the funds back to your foreign account without any restrictions.

●       NRO (Non-Resident Ordinary) Account: NRO FDs are meant for your Indian earnings, such as rent, dividends, or interest. While the interest is repatriable within specific limits, the principal amount has some restrictions.

●       FCNR (Foreign Currency Non-Resident) Account: FCNR FDs are maintained in foreign currencies, ensuring that your deposits remain unaffected by exchange rate fluctuations. The principal and interest are fully repatriable.

2.      Diversify your deposits

Consider diversifying your FD investments among NRE, NRO, and FCNR Accounts based on your needs. 

3.      Choose the suitable tenure

Different FDs offer varying tenures, and selecting the one that suits your financial goals is crucial. Short-term FDs are ideal for easy liquidity, while long-term FDs provide higher interest rates.

4.      Regularly review and renew

Remember to keep track of the maturity dates of your FDs. Before they mature, evaluate your financial situation and goals to decide whether to continue, withdraw, or reinvest.

5.      Ladder your FDs

Consider creating an NRI FD ladder by staggering the maturity dates of your deposits. This strategy allows you to access funds periodically and benefit from better interest rates on longer-term deposits.

6.      Understand tax implications

Learn about the tax implications of your FDs in India and your home country. NRE FDs and FCNR FDs are tax-free in India, while NRO FDs may attract taxes.

7.      Nomination and legal aspects

Ensure you nominate a beneficiary for your FDs. Familiarise yourself with the legal aspects, as rules and regulations may change. This simplifies the transfer of funds in case of your demise.

8.      Stay updated on exchange rates:

If you have an FCNR Account, keep an eye on exchange rates. Timing your repatriation helps you take advantage of favourable exchange rates.

9.      Use Online Banking:

Benefit from Online Banking services to track your FDs, monitor interest rates, and make necessary transactions conveniently.

10.  Emergency fund allocation:

Maintain a portion of your NRI FD Account in a liquid form to quickly access emergency funds.

11.  Regularly assess your financial goals:

Your financial goals may change over time. Periodically manage your investments and ensure they align with your evolving objectives.

12.  Seek professional advice

Consult a financial advisor to clarify the best approach to working with your NRI FDs.