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Federal Bank NRE Fixed Deposits

Maximize Your NRI Investment with Federal Bank NRE FD: Attractive Rates, Tax Benefits, and More!
6
min read
February 3, 2024
Federal_bank_nre_fixed_deposits

Content Overview :

1. Types of Federal Bank NRI Fixed Deposits

2. Features & Benefits

3. Federal Bank NRE FD Interest Rates August 2023

4. How to Open Federal Bank NRE FD Account

5. FAQs


Federal Bank offers a range of fixed deposit schemes tailored for Non-Resident Indians (NRIs) to ensure they get the best returns on their investments. These fixed deposits are designed to cater to the unique financial needs of NRIs, providing them with attractive interest rates, tax benefits, and easy repatriation options.

Types of Federal Bank NRI Fixed Deposits

Federal Bank provides various fixed deposit schemes for its NRI clientele. The most prominent among them is the Federal Bank NRE Fixed Deposit. This deposit scheme allows NRIs to invest their foreign income in India and earn attractive returns without worrying about currency fluctuations.

Federal Bank NRE Fixed Deposit

Features & Benefits

The Federal Bank NRE FD is a popular choice among NRIs looking for a reliable investment avenue in India. Here's why:

  • Attractive Investment Scheme: The Federal Bank NRE FD is an ideal option for those seeking a lucrative investment avenue. By parking your funds here, you can earn a periodic income through interest.
  • Flexible Tenure: Choose a tenure that suits your financial goals, ranging from a minimum of 1 year to a maximum of 10 years.
  • Tax Benefits: Interest accrued on NRE accounts is exempt from the Indian Income Tax Act, as long as the NRI remains a resident outside India. Additionally, there's no wealth tax payable for the amount maintained in NRE accounts.
  • Loan Facility: Avail an advance of up to 90% of your deposit. This loan can be repaid through various means, including remittance from abroad or by liquidating the deposit.
  • Easy Repatriation: Both the principal amount and the interest earned can be easily repatriated outside India.
  • Premature Withdrawal: While premature withdrawal is permitted, it's essential to note that no interest will be paid if the withdrawal occurs before the completion of 1 year.
  • Minimum Investment: Start your NRE FD with a minimum amount of INR 500/-.
  • High Yield Investment: Thanks to the tax benefits, the Federal Bank NRE FD ensures a high-yield investment for non-residents.
  • Easy Application Process: Opening a Federal Bank NRE FD is hassle-free. You can initiate the process online, fill out the necessary form, and courier the required documents to the bank in India.
  • Joint Operation: The NRE FD account can be jointly operated, allowing your partner to manage funds alongside you. This feature offers the unique advantage of global accessibility, enabling withdrawals and shopping worldwide.

In essence, the Federal Bank NRE Fixed Deposit scheme stands out as a trustworthy investment avenue, promising assured returns through interest.

Federal Bank NRE FD Interest Rates August 2023

Federal Bank is known for offering competitive interest rates on its NRE Fixed Deposits, ensuring that NRIs get the best returns on their investments. Here are the interest rates for Federal Bank NRE FD for the year 2023:

Interest rates for NRE Term Deposits effective from 21-09-2023

Interest_rates_for_NRE_Term_Deposits_effective

Effective Annualized Rate of Return: The effective annualized rate of return provides a clearer picture of the actual returns on your investment, taking into account the compounding effect.

Effective_Annualized_Rate_of_Return

Note: Rates are indicative in nature.

Interest rates for Resident Term Deposits of Rs.2 crore and above: For substantial investments exceeding Rs.2 crore, Federal Bank offers specialized rates to ensure maximum returns. 

Interest_rates_for_Resident_Term_Deposits

*Note: Senior citizen benefit is not applicable for single deposit of Rs.2 crore & above. Rates quoted

Interest rates for NRE Deposit Plus Scheme - NRE Term Deposits without option for Premature Withdrawal

Interest_rates_for_NRE_Deposit_Plus_Scheme

Note: Rates are indicative in nature.

Federal Bank NRE FD rates August 2023: It's essential to stay updated with the latest interest rates, as they can fluctuate based on economic conditions. For the most recent rates applicable in August 2023, kindly refer to the bank's official website or get in touch with a bank representative.

How to Open Federal Bank NRE FD Account

Opening a Federal Bank NRE FD Account is a straightforward process. Here's a step-by-step guide:

  1. Online Application: Begin by visiting the official Federal Bank website. Navigate to the NRI services section and select the NRE Fixed Deposit option.
  2. Fill Out the Application Form: Complete the online application form by providing all the necessary details, including personal information, contact details, and the desired tenure for your FD.
  3. Document Submission: After filling out the form, print it. Attach self-attested copies of the required documents, such as your passport, visa, overseas address proof, and recent photographs.
  4. Courier the Documents: Send the printed form along with the attached documents to the bank's designated address in India.
  5. Verification: Once the bank receives your application and documents, they will verify the details. If everything is in order, they will proceed with the account opening process.
  6. Deposit the Amount: After your account is activated, you can transfer the desired amount from your NRE savings account to the NRE FD account.
  7. Confirmation: Once the deposit is made, the bank will send you a confirmation along with the details of your NRE FD.

Remember, the Federal Bank NRE FD can also be opened jointly, allowing for more flexible fund management. Ensure that all provided information is accurate to avoid any delays or issues in the account opening process.

FAQs

Q1. What is the minimum and maximum tenure for Federal Bank NRE FD?

Federal Bank NRE term deposit offers a flexible tenure for its customers. The minimum period to invest in this deposit is 1 year, ensuring that your funds are locked in to earn a competitive interest rate. On the other hand, for those looking for a longer-term investment, the bank provides an option to invest for up to 10 years. This range allows customers to plan their investments according to their financial goals and liquidity needs.

Q2. Is the interest earned on Federal Bank NRE FD taxable in India?

The interest earned on the Federal Bank NRE FD is favorable for NRIs from a taxation perspective in India. The interest accrued on these accounts is exempt from the Indian Income Tax Act. This exemption applies as long as the account holder maintains their status as a non-resident Indian. This tax benefit enhances the overall returns for the investor.

Q3. Can I prematurely withdraw my Federal Bank NRE FD? What are the implications?

Yes, the Federal Bank understands that financial needs can arise unexpectedly. Therefore, they allow premature withdrawal of the NRE FD. However, it's essential to note that if the withdrawal occurs before completing 1 year, no interest will be paid on the deposit. It's always advisable to be aware of this clause to make informed decisions about breaking the FD.

Q4. How secure is my investment with Federal Bank NRE FD?

Federal Bank has a longstanding reputation and is one of the major banks in India. When you invest in their NRE FD, you're entrusting your money to a well-established institution. The interest rates are competitive, and the bank ensures that your investment grows steadily over the chosen tenure.

Q5. Can I avail a loan against my Federal Bank NRE FD?

Absolutely! Federal Bank offers the facility to avail an advance up to 90% of your deposit amount. This feature ensures that while your money continues to earn interest, you can also meet any immediate financial requirements. The repayment of this loan can be done through various channels, including remittance from abroad, transfer from other NRE/FCNR/NRO accounts, or even by liquidating the deposit.

Q6. How can I open a Federal Bank NRE FD account online?

Opening an NRE FD account with Federal Bank has been made convenient with their online services. You can start the process by visiting the Federal Bank website and filling out the application form. Once filled, you'd need to print the form, attach the self-attested copies of the required documents, and then courier it to the bank's designated address in India. The online initiation process reduces the hassle and speeds up the account opening procedure.

Q7. What are the tax benefits associated with Federal Bank NRE FD?

The Federal Bank NRE FD offers significant tax advantages for non-resident Indians. The interest earned on these deposits is exempt from Indian Income Tax, ensuring that your returns are not diminished by tax deductions. This feature, combined with competitive interest rates, makes the NRE FD a high-yield investment option for NRIs.

Q8. Is repatriation of funds from Federal Bank NRE FD straightforward?

Yes, the Federal Bank ensures that repatriation of funds from the NRE FD is hassle-free. Both the principal amount and the interest earned can be repatriated outside India whenever required. This feature provides flexibility and ease of access to your funds, even if you're residing abroad.

Q9. Can I open a joint NRE FD account with Federal Bank?

Yes, the Federal Bank allows the opening of joint NRE FD accounts. This facility can be particularly beneficial for families where both partners wish to manage the funds together. A joint account provides the unique advantage of shared accessibility, ensuring that both parties can operate and manage the account seamlessly.

Q10. Are there any additional benefits or features of the Federal Bank NRE FD that I should be aware of?

Apart from the attractive interest rates and tax benefits, Federal Bank NRE FD offers several other features. For instance, in the case of cash certificates, interest accrued on a quarterly basis is added back to the principal, effectively creating a reinvestment plan. This compound interest mechanism ensures that your money works harder and grows faster. Additionally, the bank offers facilities like loans against the deposit, ensuring that you have financial support whenever needed.

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Tejas is an accomplished Chartered Accountant with a passion for finance. With a decade's worth of extensive experience in the banking and credit domain, he has a deep understanding of the financial landscape across consulting and start-ups. In his time away from work, Tejas enjoys sharing his knowledge and helping others understand the intricacies of this complex domain.

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