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Compare Non-Resident Indian (NRI) fixed deposits, accounting for the heavy 31.2% TDS burden on NRO accounts versus tax-free NRE accounts.
Value in INR
Net Maturity Amount
₹2,38,721
₹0 (Tax Free)
₹2,38,721
Both the principal and interest are completely, freely repatriable to your country of residence.
Non-Resident External (NRE) FDs are opened by NRIs to deposit foreign earnings in India. The funds are fully repatriable, and the biggest advantage is that both the principal and the interest earned are completely tax-free in India.
Non-Resident Ordinary (NRO) FDs are used to manage income earned in India (like rent, dividends, pension) while residing abroad. The interest earned is fully taxable in India. A TDS of 30% (plus surcharge & cess) is deducted at source.
Yes, but there is a limit. You can repatriate up to USD 1 Million per financial year from an NRO account, subject to taxes and submitting forms like 15CA and 15CB.
The base TDS rate for NRIs on NRO interest is 30%. However, education cess and surcharges are added on top, bringing the effective flat TDS rate to 31.2%. If your home country has a DTAA (Double Taxation Avoidance Agreement) with India, you can submit residency documents to potentially lower this rate.
If you want to park foreign earnings in India, definitely use NRE for tax-free compounding. If you need to deposit Indian earnings (like rent from a property in India), you must legally use an NRO account.