Opening an NRE RD Account: The Why and How


Are you an NRI looking to invest in a recurring deposit? Well, look no further; many banks have ample schemes and accompanying benefits to help you in your financial planning. You can grow your savings and benefit from the accumulation of funds.

The Non-Resident Indians or NRIs can grow their NRE (Non-Resident External) account savings by opening an NRE RD account. The Recurring Deposit (RD) account for NRIs allows them to invest money in small instalments and earn a fixed interest rate.

The duration of the deposit can be 1 to 10 years, and the investment amount can be in multiples of Rs 1000. The interest rates on NRE recurring deposit schemes are similar to the interest rates for NRE fixed deposits and can be a lucrative option for NRIs looking for a safe investment option in India.

Why Should You Open an NRE RD Account?

NRE RD account offers many benefits to the NRIs, such as;

  • Higher Interest Rates: The Interest rates offered on the NRE RD account is higher than those provided on the NRE savings account. Thus, this can be a great way to grow your unutilised funds.
  • Periodical Investment: RD accounts allow NRIs to invest money in small chunks periodically, allowing them to grow their savings regularly but steadily.
  • Repatriability of Funds: Both the interest and the principal amount held in the NRE RD account is fully repatriable.
  • Taxation Benefits: The interest earned on your NRE RD account attracts no tax in India.
  • Get Loan Against Your Deposits: Some banks offer you loans up to 90% of the value of your NRE deposit principal amount.
  • Flexible Tenure: The tenure of NRE RDs ranges from 1 year to 10 years. After completing the minimum tenure of 1 year, you can choose a period, in multiple of 3 months.
  • Favourable Exchange Rates: Most banks offer you preferable exchange rates for converting your foreign earnings into INR for funding your NRE RDs.

How to Start an NRE RD?

  • Eligibility: To open an NRE RD account, you need to;
    • Be an NRI (Non-Resident Indian), OCI (Overseas Citizen of India) or PIO (Person of Indian Origin) as per FEMA (Foreign Exchange Management Act).
    • Already have NRE savings account with the bank where you want to open the RD account.
  • Documents Required: You will need to submit a few documents depending on the nature of your work and employment.
    • For NRIs: Valid passport copy, visa copy, and address proof of India and foreign addresses.
    • For PIOs and OCIs: Along with your passport copy, you will need to submit a PIO card or Indian passport of your parents/grandparents along with a self-declaration of you holding the OCI or PIO status.
    • For Seafarers: Seafarers will need to submit a passport copy along with a visa or a CDC (Continuous Discharge Certificate) and a Seafarer declaration. You also might need some different/additional documents depending on the type of employment.
    • Students: Students will need to submit the student visa copy along with their passport and address proof.

It is best to check with the bank where you intend to open your NRE RD account for the full list of documents required depending on your nature of visa and work.

  • Process: You can open an NRE recurring deposit account after you already have NRE savings account with a bank. You can also open both the accounts together with the bank of your choice. Once you have an NRE account, opening an RD is fairly easy. Log in to your NRE account portal and click on the “Open RD Tab”. Choose the period of deposit, the amount and the frequency of deposit and start investing. You can also add a nominee to your account while opening.

Open an NRE RD and Grow Your Savings in India

NRE RDs can be a great way to grow your savings in INR as you earn in a foreign currency. Make sure you choose a reliable bank that offers good support and other privileges to make it easier for you to operate your account.