A fixed deposit is a great option for a long-term investment. A fixed deposit is a financial instrument offered by a bank or an NBFC. This offers all investors a higher interest rate as compared to the savings account.
From October 22, 1997, the RBI has given all commercial banks the freedom to fix their own interest rates on term deposits (domestic). However, they need prior approval from the Board of Directors/Asset Liability Management Committee (ALCO).
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As of today, in India, we have 46 foreign banks. Let us look at the fixed deposit interest rates for these banks:
Bank Name | Interest Rates for Tenure 1-2 years | Interest Rates for Tenure 3-5 years | Interest Rates for Tenure 5-10 years |
Standard Chartered Bank | 7.25% -7.35% | 6.75% | 6.75% |
HSBC Bank | 4.00% - 4.25% | 4.25% - 7.50% | 6.00% |
Deutsche Bank | 7.00% -7.50% | 7.75% -7.00% | 7.25% |
DBS Bank | 6.25% - 7.25% | 6.50% | 6.50% |
Barclays Bank | 5.89% -5.86% | 5.69% -5.67% | 5.69% -5.74% |
Doha Bank | 6.50% - 7.30% | 6.25% | 4.25% |
AB Bank Ltd. | 6.40% to 6.50% | -- | -- |
Abu Dhabi Commercial Bank Ltd. | 4.35% to 4.40% | 4.40% | -- |
J.P. Morgan Chase Bank N.A. | 4.89% | 4.89% | 4.89% |
Australia and New Zealand Banking Group Ltd. | 0.15% | 0.15% | 0.15% |
BNP Paribas | 2.30% | 2.50% | -- |
*The above interest rates are effective from May 2023.
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Eligibility Criteria to Apply for FDs in Foreign Banks
The candidates from the following category can apply for fixed deposit in a foreign bank:
- Any individual (resident, NRE, or NRO)
- Hindu Undivided Family (HUF)
- Proprietor
- Partnership firm
- Trust
- Associations
- Club
- Company
Documents Required to Apply for FDs in Foreign Banks
The following are documents that are required to apply for a FD in a foreign bank:
- PAN and KYC documents including address proof and other identification proof
- Passport size photograph of the members concerned with the FD account
- Other documents are category specific and those are:
Individual, HUF, and Proprietor
- Deed of declaration of HUF
Trust
- Registration certificate copy
- Trust deed copy
- Authorisation copy for the members concerned with account opening and operation
- Copy of Resolution of the Trustees
Partnership firm
- Letter from partners regarding FD account opening
- Partnership deed
Company
- Identification of the authorised signatories
- Board resolution
- Incorporation certificate
- Article and memorandum of Association
Associations and club
- Board Resolution copy for FD account opening and operation
- By-laws of the Association
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FAQs on Foreign Banks Fixed Deposit Rates
- What will happen if I do not claim the amount after maturity of the fixed deposit?
If you do not claim the amount after maturity, you will get less interest in it. The interest will be equal to the amount you get in the savings account.
- In how many years will a fixed deposit amount double?
The fixed deposit can be doubled depending on the rate of interest that is being offered.
- Can a 5-year tax-saver fixed deposit be broken?
A 5-year fixed deposit cannot be broken before its tenure of 5 years is completed.
- How much higher are fixed deposit rates?
Banks give more than 5% interest on a fixed deposit with a long tenure (5 to 10 years). The interest rates on savings accounts can range between 3% and 4%.
- Is a fixed deposit tax free?
No, it's not tax free. However, you can get tax exemptions if you opt for tax-saving fixed deposits. Under such a fixed deposit you can claim a deduction of up to Rs.1.5 lakh under section 80C of the Indian Income Tax Act, 1961.
- Can a foreigner open FD in India?
A Person of Indian Origin (PIO) or Non-Resident India (NRI) can invest for a fixed tenure in an FCNR fixed deposit. Individual investing in this account will not suffer exchange loss in case the NRI account holder returns to India.
- Is interest earned on FCNR account taxable in India?
No, the interest earned on FCNR account is not taxable in India.
- Can I close my FCNR Deposits prematurely?
Yes, you can close your FCNR deposits prematurely depending upon certain clauses. If the FCNR deposit is closed before completion of 1year then no interest will be payable, and no penalty will be charged. While, after completing one year the interest payable will be calculated depending upon the period for which the deposit was held with the bank, but no penalty will be charged.
- Can I get loans against my FCNR Deposits?
Yes, you can avail yourself of a loan against your FCNR deposit and the loan amount depends upon the FCNR currency that includes, 80% for GBP, 85% for USD, and 70% for EUR, CAD, or GBP.
- Does an FCNR, NRE, NRO, or RFC Fixed Deposit account provide cheque book and debit card?
No, you will not be receiving a cheque book and debit card for your FCNR, NRE, NRO, or RFC fixed deposit.
