Better deal for NRIs at home as banks raise deposit rates

Earlier this month, State Bank of India, Indian Bank and Federal Bank increased rates on NRI deposits for various tenures. “Parking money in NRI deposits depends on a lot of factors, including where you live and where you expect to utilise these funds. Given that interest rates in western Europe and the US are at historically low levels, deposits in India can give a higher return than leaving money in a bank in Europe or the US. However, one needs to be aware that by leaving money in rupees, one could be exposing oneself to adverse currency movements if the foreign exchange rates fluctuate and the NRI seeks to take the money out,” said Kartik Verma of iTrust Financial Advisors.

“For most part of 2010, inflows into NRI deposits were 64 per cent higher at $3.474 billion compared with $2.114 billion that came in the same period a year ago. The trend is expected to continue,” said Adhil Shetty, chief executive officer of BankBazaar.