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The benefits of an NRI deposit account

An NRI deposit account is convenient if you're planning to settle or move overseas, or if you're already overseas and need to transfer money back to India.

There are a few types of non-resident Indian (NRI) deposit accounts.

  • Non-resident external (NRE) rupee fixed deposits
  • Non-resident ordinary (NRO) fixed deposits
  • Foreign currency non-resident (FCNR) accounts
  • Resident foreign currency (RFC) deposits

Each of these NRI deposits would be suitable for different NRI investment requirements.

Why open an NRI account?

Besides convenience, an NRI deposit account:

  • carries a fixed interest rate on the deposits, which is fixed at the time of deposit creation itself
  • allows you to repatriate funds, with no limits, from an NRE account (Indian earnings are liable for taxation before they can be repatriated through an NRO account)

In India, there's no tax applicable to funds in your NRE accounts. However, interest earned on NRO accounts is taxable. Please check the tax regulations in your country or region of residence to understand how tax is applied.

4 types of NRI accounts and their benefits

It's important to know the differences between the NRI accounts. What you choose will depend on how you're planning to manage your income and investments.

1. NRE deposits

Non-resident rupee fixed deposits are denominated in Indian rupees and can be funded from overseas remittances or transferred from another NRE account. Such deposits should have a minimum investment period of one year and a maximum of up to 5 years. If the deposit is withdrawn early before completion of the minimum tenor, the bank pays no interest.

2. NRO deposits

Non-resident ordinary (NRO) fixed deposits are also denominated in Indian rupees. These deposits, which range from 7 days to 5 years tenure, are flexible regarding the source of funding for the account – whether offshore or domestic. However, the amount invested is subject to repatriation restrictions. Interest earned is subject to income tax deduction at the source. 

You must open an NRE or NRO account with us first if you'd like to open an HSBC fixed deposit account.

3. FCNR deposits

Such deposits are denominated in foreign currency. Benefits include allowing the NRI depositor to invest in India and still preserve its relative purchasing power against the Indian rupee when the funds are transferred back to their country of residence. Like NRE deposits, FCNR deposits are also freely repatriable, and the interest income is tax exempt.

4. RFC deposits

RFC deposits are denominated in foreign currency and can be converted into Indian rupees at a later date. This allows you to choose the most favourable exchange rates. Funds held in NRE and FCNR accounts can be transferred into RFC deposits when you return to India. The money can then be used to make overseas remittances without prior approval. HSBC RFC accounts support US dollars, pound sterling, Japanese yen and euro deposits.

Like NRE deposits and FCNR deposits, both the principal and interest of RFC deposits are fully repatriable, and interest income is not taxable. 

How to open an NRI deposit account

If you're banking with HSBC and have decided on a deposit account, you'll need to:

  • visit HSBC online to submit an application form to open an NRI account
  • wait for an HSBC representative to call you at the appointed date and time to discuss the deposit requirement and schedule document pick-up
  • verify the source of funding, in the case of NRE or FCNR deposits, as it's one of the preliminary eligibility criteria as per Reserve Bank of India (RBI) Regulations

Ready to apply for an NRI account?

If you're planning to settle abroad, having an NRI account is important. Based on your needs, you can easily open an NRO or NRE bank account with HSBC. Both HSBC Premier and HSBC Personal Banking accounts can now be opened online. 

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Note: The information provided in this article is for informational purposes only. You may consult professionals for specific guidance for the applicable Income Tax rules and FEMA Regulations, as these are subject to changes.


Disclaimer: This publication has been issued by The Hongkong and Shanghai Banking Corporation Limited (HSBC), India, Incorporated in Hong Kong SAR with limited liability, for the information of its customers only. This publication does not constitute investment advice or an offer to sell, or a solicitation of an offer to purchase or subscribe to any product / investment. The information herein is derived from sources believed to be reliable and the concerned Information Provider(s) have duly authorized HSBC to use such information provided by them. Whilst every care has been taken in compiling the information, HSBC and the concerned Information Provider(s) do not guarantee, or make any representation or warranty and accept no responsibility or liability as to its accuracy or completeness and shall not be liable for damages arising out of any person's reliance upon this information or any action taken or not taken as a result of any material contained in the publication. Expressions of opinion are those of HSBC and the Information Provider(s) only and are subject to change without notice. HSBC has not independently verified any information provided by the Information Provider (s) or that has been derived from the sources believed to be reliable by HSBC. Opinions expressed herein do not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this publication. This document is for circulation in India only. No part of this publication may be reproduced or stored in a retrieval system without the prior written permission of HSBC. Any liability is accordingly expressly disclaimed by HSBC, its officers, directors and employees.