Sunday, January 22, 2017

Recurring deposit for NRI – latest offering from Indian banks

Recurring deposit for NRI customers
NRI recurring deposit is a new investment option offered by many Indian banks like HDFC Bank, SBI, ICICI and Kotak Mahindra, after their successful run with NRI fixed deposit. With almost 25-30% rise in exchange rates of USD to INR during the span of one year has made remitting money to India and investing in recurring and fixed deposit a lucrative option. Recurring deposit for NRI is available on HDFC bank and it may also available through other banks like Kotak Mahindra which I yet to check. I liked recurring deposit for NRI because it doesn't require you to invest wholesome amount and you can still take advantage of high-interest rate combine with super exchange rate before it’s too late. As it's quite clear that interest rates in India will only go down in near term, they are already fallen from their peak and exchange rate is also fluctuating I think locking money in recurring deposit is the best one can do if he wants to keep money in Indian rupees or want to pay EMI though that money or buy a house.

NRI or NRE Fixed Deposit vs Recurring Deposit

Most of us are familiar with what is an NRI fixed deposit and NRI recurring deposit but I still summarize for all of our friends. Fixed deposit is putting your money in the lump some for a fixed tenure i.e. tenure and amount are fixed and you need to give money at the time of opening fixed deposit account.

If this account is open by NRI its called NRI fixed deposit. currently Indian banks provide two kinds of account to NRI customers who are living outside of India like in US, UK, UAE, Singapore, Hongkong and other middle east countries, first is NRE savings account and second is NRO savings account.

I will highlight the difference between NRE and NRO in some other post but for now, you should know that having NRE account helps to create fixed and recurring deposit online. Now the difference between recurring and fixed deposit is that in recurring deposit you can start investing without a lump sum amount with a commitment of investing a fixed small amount each month like instead of investing 50K, 1K for 50 months. Interest is calculated little different for fixed and recurring deposit and can be the best check on bank website before opening an account.

HDFC recurring deposit for NRI customer - Important features

You can open an NRI recurring deposit through HDFC bank if you have an NRE savings account with them. I think it can be done online as well so no hassle on opening recurring deposit.

Here is few important feature of HDFC recurring deposit in NRE accounts:

NRI Recurring Deposit in Indian Bank

1) Minimum amount to invest in the recurring deposit is 500 and maximum amount is below 15 lacs.

2) Minimum duration is 12 months and the maximum duration for recurring deposit is 10 years. After 12 months it should be in multiple of 3 months like 15 months, 18 months etc. Investing for longer duration is good given the high-interest rates available for NRE customers.

3) The best part is that interest earned on recurring deposit and maturity amount is completely tax-free in India and fully repatriable, means you can get your money back in the dollar if you like.

4) They are also providing the grace period of 5 days which means you can pay installment during 5 days after your installment day without any penalty or surcharge.

5) Interest is subject to change so check it out before it’s too late. Currently, they are offering same interest rates as on NRE fixed deposits and as of writing this post it’s following

12 Months 7.25%
15 Months 8.50%
24 Months 8.50%
27 Months 9.25%
36 Months 9.25%

Clearly for 27 to 36 month it's best.

6) Don’t forget about lock-in period, NRE recurring deposit has a minimum locking period of 12 months, during this duration you can not break your RD.

7) Carefully choose Installment amount which you are going to pay every month as once choose it can not be changed so decide how much you can invest per month which doesn't put you any pressure during any situation. Normally 3-5% of your monthly income is good to invest in NRE recurring deposit.

8) The interest of NRE recurring deposit will be paid once your RD will mature.

These were some of the features of HDFC recurring deposit, you can check more on their site

Most of other banks like State Bank of India SBI, ICICI bank, YES banks and Kotak Mahindra are also providing options of NRI recurring deposit you can compare their interest rates before investing your money. But remember that always choose where you can perform transaction online and since most of them require an NRE savings account its best to go for HDFC bank.


  1. Recently SBI (State Bank of India) has raise there NRE rupee fixed deposit rate by 25 bps and now offering an attractive 9% per annum on NRE deposit upto 15 lachs on quarterly compounding basis for 3 to 5 years period. This looks like another Great opportunity to invest in NRE fixed deposit given interest rates are off from peak and going down. By the way which banks should I choose for investing NRE and NRO recurring or fixed deposit ?

  2. Dears,

    I feel NRE Recurring Deposit is the best for NRIs. The drawback in Fixed deposit is, you need to open FD every month and the money will be locked for next 12 months at least. in case, if you do FD every month and if you want to withdraw your all FDs at the end of 1 year, you will have to break the FDs for the past 11 months and those FDs will not earn a single penny. The same FD amount if you put in RD, even the 11th month amount will earn 1 month interest at the end of 1 year maturity.

  3. how to apply from Oman

  4. How can we pay the monthly installment of an NRE Recurring deposit account? Is there a way to avoid transfer charges every month? - Thank you.

  5. Can you please let us know what happens if we miss one or more payments on Recurring deposit ? Does they close the account or we can just invest more money in coming months? Is rules different for NRE and NRO recurring accounts ?

  6. I found this post to be very educational. Thank you for broadening my knowledge of this subject. No doubt its a great piece of writing as well. Thanks

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