The Reserve Bank of India (RBI) has recently announced that the interest rate cap on Non-Resident Indian (NRI) accounts will be lifted till 31 October 2022!
This means that banks are offering higher interest rates and NRIs can now earn more on their deposits, so long as the banks, they are depositing with, participate in this scheme.
Looking to milk this opportunity? Read on…
What’s the backstory for the change?
The Reserve Bank of India (RBI) has made a move to try and get more people to invest in dollars.
What type of bank accounts qualify for this change?
There are two types of account that are qualify:
- Non-Resident External (NRE) account
- Foreign Currency Non Resident Account (also known as FCNR B account)
Then what is FCNR (B) account?
FCNR(B) is a type of fixed deposit account that allows people who are not from India but have Indian origins, to put their foreign income in Indian banks.
The amount is not converted to rupees, and it allows you to hold currencies like:
- Australian dollar
- British pound sterling
- Canadian dollar
- Singapore dollar
- US dollar
- and more…
The deposited money will earn interest, and the principal amount and the interest amount are tax-free and can be taken out of India whenever you want.
Er… what makes it different from Non-Resident External (NRE) account?
NRE deposit means that someone is converting money from another country, like the United States, into rupees. They put the converted money into a fixed deposit, which is like a savings account in India.
So which banks are a part of this new change?
You can set up a NRE account or FCNR (B) account via these banks:
What are some things to take note of?
Now is the best time to deposit your money!!!
If you deposit money between July to October 2022, your interest rate will be locked in for the entire time you have the account. The interest earned from these deposits will also be exempted from taxes in India.
But do take note that there is a penalty of 0.25-1.0% if you withdraw money before one year, and no interest is paid if you withdraw the money before one year.
So what are you waiting for? Send money to NRE OR FCNR (B) bank account via Instarem now!
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