NRO Recurring Deposit Account with FAQs 2024

Recurring Deposit account (RD) is an account where a person deposits a fixed amount of money every month for certain period of time and gets a lump sum amount after the tenure is over. RD is helpful in regularizing savings by encouraging a saving habit. In India, an RD account can be opened in banks, NBFCs or Post offices. Recurring Deposit is offered for different tenures and different rates of interest each suitable for persons with different financial status.

What is NRO Recurring Deposit Account?

Non Resident Indians (NRI) can also invest in a Recurring Deposit account. This Recurring Deposit account is somewhat different from a regular Recurring Deposit account. NRO Recurring Deposit Account can be opened either online or in person.

NRO Recurring Deposit Account is a suitable option for NRIs to save big amount by investing small sums of money every month. It's suitable for those who want to steadily increase their wealth. In India, the NRO Recurring Deposit Account is maintained in Indian Rupees (INR). Funding of account can be made easily from your NRE or NRO savings account which means the account holder is free to transfer funds from his NRE or NRO savings account to his NRO RD account every month. In this way, the NRI can earn higher rate of interest. NRO Recurring Deposit Account comes with following features,

• Invest small sum every month for a fixed tenure & receive lump sum amount on maturity.
• Flexibility to decide monthly installment as per your convenience and objective, no lump sum is required.
• Excellent tool for achieving financial goals.
• Maintained in Indian Rupee.
• Safe from the effects of market volatility.
• Offers higher interest rate than that of a savings account. Once NRO RD is opened the investor will get fixed interest rate which is prevailing at the time of opening NRO RD account.

Highlights of NRO Recurring Deposit Account

Why NRO Recurring Deposit Account?

Unlike Fixed Deposit, which require a lump sum initial investment, RD account allow depositors to deposit smaller amounts regularly. When an NRI wants to deposit a small amount every month instead of making a lump sum investment, he can open an NRO Recurring Deposit Account. In this account, the investment per month will not be large which means small money deposited every month will add up to build a large sum of money for the depositor. It is a valuable tool for the young persons to invest money regularly and to encourage them to avoid unnecessary spending.

You can calculate the interest earned on your RD maturity with the help of RD Calculator.

Eligibility Criteria: NRO Recurring Deposit Account

Following persons are eligible to open NRO RD Account.

• The applicant should be a Non Resident Indian (NRI). The accounts can be opened in single/joint names.
• The joint account holder can be a non-resident or a resident.
• Many banks also offer NRO Recurring Deposit Account to PIO (Person of Indian origin)/ OCI (Overseas Citizen of India).
• The NRI, who is the first holder in the account, also has the option to add an Indian resident as a joint holder.

Good to note that some of the banks also allow to open an NRO RD account foreign tourists during their stay in India for a certain period of time.

Documents Required for NRO RD Account

• Duly filled up Account Opening Form with photograph.
• Self attested photocopy of your passport.
• Valid work permit/ Employment visa/ Residence Visa/ Residence Permit.
• Proof of Address: Indian and overseas address proofs.
• Funds from customer’s self KYC complied account

NRO Recurring Deposit Account FAQs

I am an NRI. Why should I invest in NRO Recurring Deposit Account?

You should open NRO Recurring Deposit Account to get the benefit of higher interest rates and long term investments. Your long term financial goals can easily be achieved by investing in NRO RD.

When can I access my NRO Recurring Deposit Account?

You can access your NRO Recurring Deposit Account anytime from anywhere as banks provide free internet banking facility which allows 24-hour access to your account from anywhere at anytime. You can access your bank account through a computer or mobile device as well.

Can I open my NRO Recurring Deposit Account from outside India?

Yes, you can submit application for account opening from outside India. You can open the account online.

Can I transfer funds from my NRO Savings account to NRO Recurring Deposit Account?

You can transfer funds every month from your NRE or NRO Savings account to your NRO Recurring Deposit Account.

What is the tenure for NRO Recurring Deposit?

Tenure of NRO Recurring Deposit Account ranges from 6 months to 10 years. Minimum tenure will be for 6 months and thereafter in multiples of 3 months.

Does NRO Recurring Deposit Account offer nomination facility?

Yes. NRO Recurring Deposit Account offers the nomination facility. Nomination can be in favour of a resident or Non-resident Indian.

Can I have a joint holding in my NRO Recurring Deposit account?

Yes. The NRI, who is the first holder in the account, also has the option to add an Indian resident as a joint holder.

Is Interest earned in my NRO Recurring Deposit account repatriable?

Interest earned in current financial year is fully repatriable subject to payment of tax. Funds in NRO account can be repatriated upto USD one million per financial year for all bonafide purposes.

Is interest earned in my NRO Recurring Deposit account taxable?

Interest earned is subject to tax of 30% plus surcharge and cess.

Will there be any TDS on interest income in my NRO RD account?

Interest earned on NRO deposits is subject to the applicable tax deduction at source (TDS). TDS Certificate will be issued, as per IT Act.

Is the premature withdrawal of NRO RD allowed?

Yes. Mostly banks allow premature withdrawal at the request of the account holder.

What would be the exchange rate towards conversion of your foreign currency into Rupees?

Competitive exchange rates on conversion of your foreign currency into Rupees.

Whether Internet Banking Service is available to NRO RD account holders?

Yes, the Internet Banking Service (IBS) is available to NRO RD account holders 24X7 from anywhere which is provided upon request from the account holder.

Who is an Non-Resident Indian (NRI)?

Non-Resident Indian (NRI) is an Indian citizen who stays outside India for any of the following reasons,

• For purposes of carrying out employment or any business or vocation
• Under circumstances indicating an intention to stay outside India for an uncertain duration
• Any Indian citizen deputed outside India for a temporary period in connection with employment

What is the Rate of Interest payable on NRO RD account?

Interest Rate payable on NRO RD account is usually the same as it is payable under domestic RD account.

Who is a Person of Indian Origin (PIO)?

Person of Indian Origin (PIO) is a citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO, if any of the following conditions fulfills,

• He/she at any time held an Indian passport
• He/ she or either of his/ her parents or any of his/ her grandparents was a citizen of India
• Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen or (a) or (b) above

Is the addition or deletion of the name/s of joint account holder/s allowed?

Yes. Banks allow the addition or deletion of name/s of joint account holder/s at the request of all the joint holders, as per rules.