Seattle Desi

Check out my introduction to NRE Deposits for additional information/links People tell me that the US$ might cross Rs 55 in the next 3-6 months. Should I wait? Needless to say – exchange rates depend on various factors, and it’s hard to accurately predict the future exchange rates Assuming a 9% pa interest, Rs 53 will become Rs 54.2 (before taxes) in 3 months. It’s your call on whether you want a guaranteed increase of Rs 2.2 (pre-tax) vs a possible increase of Rs 3+ Do a similar calculation if you are expecting to see a bigger change in the exchange rate As I've mentioned in my introduction , exchange rate variations are the biggest risk to these FDs Should I go with cumulative NRE FDs (i.e. interest get compounded)  or with standard NRE FDs (i.e. interest get paid out monthly/quarterly) Factors to consider include – do you prefer keeping the interest income in INR or in US$ (consider exchange rate risks), your current vs future tax bracket What time-pe...

With the US$/INR exchange rate at an all-time high, and banks offering 9+% interest on NRE fixed-deposits – many people are considering NRE deposits. Here’s a quick introduction to help with your decision. 1.        Differences between NRO & NRE accounts/deposits a.        NRO deposits are tax-deductible at source by the Indian government, whereas NRE deposits are tax-free in India (but are taxable in the country of your residence) b.       Repatriating money from NRO accounts/deposits takes non-trivial paperwork & has a limit of $250k per year. Repatriating money from NRE accounts are easier. c.         NRO accounts can be jointly owned by resident Indians, and can be used to depost income earned in rupees d.        I believe NRE accounts need to be closed if you move back to India? 2.       ...