NRO Fixed Deposit – Things to Keep in Mind


NRO account means Non-Resident Ordinary account. This is one of the two special accounts through which a Non-Resident Indian (NRI) can save and invest in India. The other is Non-Resident External or NRE account. Due to some distinct characteristics of NRO account, it is advisable to invest in Fixed Deposits in India with it.

Things to keep in mind about NRO account

  • Unlike an NRE account, NRO lets you deposit your earnings from sources in India like dividends, rent, etc. You can also deposit income from your resident country in an NRO account.
  • You can open a joint NRO account with a resident Indian, thus providing financial security to your family residing in India. A joint account with another NRI can also be opened.
  • Withdrawals can be made only in INR.
  • NRO account is immune to exchange rate risks if the deposit is made in INR; because the withdrawal also has to be in INR and so no question of currency fluctuations remains.
  • The interest earned on NRO fixed deposit account is taxable. A TDS of 31.2% is applicable if the annual interest on the deposit is less than Rs. 50 lacs. 34.32% if annual interest is more than Rs. 50 lacs but less than Rs. 1 Cr. 35.88% if annual interest is more than 1 Cr.
  • Though, you can claim tax benefit under the Double Tax Avoidance Agreement (DTAA).

Getting the best returns from NRO FD

NRIs with income sources in India can further boost their earnings with the right NRO fixed deposit account. Unlike traditional bank FDs, company FDs like Bajaj Finance FD have various benefits to offer on an NRO account.

Here’s why Bajaj Finance NRO FD is an ideal investment option for NRIs:

  1. Higher interest: With Bajaj Finance FD you can earn highly attractive interest rates of up to 8.60% if you are a new customer, and up to 8.85% if you are an existing customer. Senior citizens can get an even higher interest rate of up to 8.95%.
  2. Convenience: Online account opening and management simplifies the investing process. If you have the capital to put aside which you will not need for a long time, you can get the “Auto-renewal” facility at the time of investment; meaning on maturity of your deposit, the principal amount along with interest earned gets re-invested so you do not have to go through the hassles again.
  3. Flexibility: Bajaj Finance FD lets you decide the frequency of interest payout. Cumulative FDs have a one-time payout which is at the time of maturity while Non-Cumulative FDs offer a periodic payout option – monthly, quarterly, half-yearly or annually. You can pick the tenor of your investment from 12 to 36 months.
  4. Credibility: Credibility is an important parameter you would check before depositing a large amount somewhere. The highest safety ratings in the industry are with Bajaj Finance FD. ICRA’s MAAA/stable rating and CRISIL’s FAAA/stable rating assure guaranteed returns to investors.

The perfect tenor and the principal amount of an NRO FD differs from person to person due to individual needs and aspirations. You can decide your tenor and principal with the NRO FD calculator. When you input the details, NRO FD calculator will also provide the exact interest rate you will earn on your investment. Hence, referring to NRO FD calculator before investing will help you make a better judgement.