340. Indian bank fixed deposits

and repatriation

Q. Dear Sir I understand that Indian Banks such as ICICI gives up to 9.25% interest on cash investment over 390 days, if this is so how safe the money is? when term is matured-could all the money capital + interest be transferred /repatriate back in £ currency? Many thanks in anticipation of your reply. Ashok Khandelwal A. The 9.25% interest that you mention is being offered for NRO accounts. Money in this type of account is technically not repatriable. Only Interest can be repatriated after paying taxes. The current TDS on bank interest is 30.9%. The type of account you are looking for where you can repatriate the entire money + interest without paying taxes in India are NRE deposits. For an NRE fixed deposit the rates are a lot lower. The current rates for NRE fixed deposits, as of Oct 1, 2011 are given below. Two things you need to keep in mind when it comes to fixed deposit accounts in India. No interest will be paid if the NRE Deposit is canceled prematurely before 1 year. The interest rates for NRI accounts are controlled by the Reserve Bank of India. So you will find that generally, all banks will offer the same rate of interest. I would not worry about ICICI bank going under! your money would be safe. NRE Fixed Deposit With effect from. October 01, 2011 Maturity Period interest rates (percent per annum) 12 months and above but less than 18 months 2.61 18 months and above but less than 24 months 2.61 24 months and above but less than 36 months 2.31 36 months to 120 months 2.47 Nri’s should take in to account that even thought the interest rates on bank deposits in India are higher, there are currency conversion costs to be considered and this may decrease your actual rate of return.