In the last FY23-24, the inflow of money into NRI deposit jumped by 63.55%, reaching $14.7 billion compared to $8.98 billion in FY23. This significant rise was primarily activated by increased deposits in Foreign Currency Non-Resident (FCNR) accounts, which saw an inflow of $6.37 billion in FY24, up from $2.44 billion in FY23, and according to data from the Reserve Bank of India (RBI).
Breakdown of NRI Deposit in India Types
- FCNR Account Growth: FCNR accounts showed a substantial increase, with balances rising to $25.73 billion in March 2024, compared to $24.90 billion in February 2024 and $19.36 billion at the end of March 2023.
- NRE Deposit Trends: Non-Resident External (NRE) deposits also experienced a steady increase, reaching $98.62 billion in March 2024, up from $97.68 billion in February 2024 and $95.81 billion at the end of March 2023.
- NRO Deposit Growth: Non-Resident Ordinary (NRO) deposits rose to $27.52 billion in March 2024, compared to $27.14 billion in February 2024 and $23.69 billion a year earlier.
Also read: NRE Fixed Deposit Rates 2024: Top Banks for NRE FDs
The increase in NRI deposit, particularly in FCNR accounts, indicates a strong preference for holding foreign currency in Indian banks, possibly due to favorable interest rates or economic conditions. The data highlights a strong and growing contribution of NRIs to the Indian banking system, underlining the importance of these deposits in the overall financial condition of the country.
Contact SBNRI
Due to the lengthy process and lots of documents required to apply for NRE FD accounts, NRIs living away from India may face several challenges. At SBNRI, we understand this struggle. You can download SBNRI App to apply for an NRE Fixed Deposit account with nominal documentation with a smooth procedure.
You can also click on the button below for more information and to apply for an NRI FD account. Also, visit our blog and YouTube channel for more details.
FAQs
Are NRE fixed deposits taxable?
- The interest on NRE FD and/ or NRE savings account is not taxable under the provision of Section 10(4) of the Income Tax Act 1961 for individuals who qualify as a ‘Person resident outside India’ as per FEMA (Foreign Exchange Management Act).
What currency can I use to invest in an NRE FD account?
- You can deposit any convertible currency in an NRE FD account.
Can I continue my NRE FD after I return to India?
- Yes, you can continue to maintain your NRE FD until its maturity even after you return to India.
Is NRE fixed deposit a good investment?
- As NRE FDs come with a host of benefits, it is an ideal investment option for NRIs to earn decent returns on their deposits.
Which bank offers the highest interest rates on NRE FD?
- NRE fixed deposit rates vary from bank to bank based on the tenure of a fixed deposit. As of now, Yes Bank and IndusInd Bank are offering the highest NRE fixed deposit interest rates in India at 6.50% per annum.
Can I get a loan in India against my NRE fixed deposit?
- Yes, many banks offer a loan against an NRE fixed deposit of up to 90% of the deposit amount.
Is the interest earned on NRE fixed deposit repatriable?
- Yes, both the principal and interest earned on an NRE FD are fully repatriable.
Is NRE FD taxable in India?
- No, deposits made in an NRE fixed deposit are not taxable in India.
Is TDS deducted on NRE FD interest?
- TDS is not deducted on interest earned from NRE FDs.
