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Union Bank of India, one of the country's leading financial institutions, offers a myriad of banking solutions tailored to meet the diverse needs of its customers. Among its vast array of products, the Union Bank NRO Fixed Deposit stands out as a preferred choice for Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO). This product is designed to offer attractive interest rates and flexible tenures, making it an ideal investment avenue for those looking to grow their savings in India.
Features and Benefits of Union Bank NRO FD
The Union Bank NRO FD is not just another fixed deposit scheme; it's a meticulously designed product that caters to the unique needs of NRIs and PIOs. Here are some of its standout features and benefits:
Competitive Interest Rates: The Union Bank NRO FD Rates are competitive, ensuring that your savings grow at an optimal pace. The bank periodically revises these rates, ensuring they remain in line with market dynamics.
Flexible Tenures: With tenures ranging from a minimum of 15 days to a maximum of 10 years, depositors have the flexibility to choose a term that aligns with their financial goals.
Repatriation of Funds: One of the significant advantages of the Union Bank NRO FD is the ability to repatriate the interest earned, net of applicable taxes. While the principal amount has certain restrictions, the interest can be transferred to a foreign currency, making it convenient for NRIs.
Joint Account Facility: The NRO FD account can be opened jointly with other non-residents or resident Indian citizens. If held jointly with residents, the joint account holder should be a close relative as per RBI guidelines, and the operational mandate should be "FORMER OR SURVIVOR."
Nomination Facility: To ensure smooth transition and access to funds in unforeseen circumstances, the bank provides a nomination facility for the NRO FD accounts.
Power of Attorney Operations: Account operations via Power of Attorney are permitted, albeit with certain restrictions. This feature is especially beneficial for those who may not be present in India but need someone to manage their account on their behalf.
Tax Implications: It's essential to be aware of the tax implications associated with the Union Bank NRO FD. The interest earned on these deposits is subject to a TDS of 30.90%. If the interest amount exceeds Rs.10 lakhs, the TDS rate is 33.99%. However, NRIs from countries with a Double Taxation Avoidance Agreement (DTAA) with India can avail of lower TDS rates.
Union Bank NRO FD Rates 2023
The interest rates for the Union Bank NRO FD are subject to periodic revisions by the bank. As of 23rd May 2023, the rates for different maturities for NRO Rupee Term Deposits are as follows:
(Note: This table showcases a subset of the rates. For a comprehensive list and rates for deposits of Rs. 2 Crores and above, it's advisable to contact the nearest Union Bank branch or visit their official website.)
Documentation and Eligibility for Union Bank NRO FD
Eligibility: The primary eligibility criterion for opening an NRO FD with Union Bank is that the individual must be a Non-Resident Indian (NRI).
Minimum Amount:
In Metro and Urban Branches, the minimum amount required to open an FDR is Rs. 10,000/-.
In Rural and Semi-urban Branches, the minimum amount is Rs. 5,000/-.
For senior citizens, the minimum amount is Rs. 5,000/- across all branches.
It's important to note that the minimum amount criteria do not apply to subsidies under government-sponsored schemes, margin money, earnest money, and court-attached/ordered deposits.
Documents Required: The documentation process is streamlined to ensure a hassle-free experience for NRIs. Here are the primary documents required:
For NRI (Non-Resident Indian):
Indian PAN card or Form 60.
A valid Indian passport.
Proof of NRI status - This can be an Employment/Residence Visa copy or a Work/Residence Permit.
Address proof (Both Overseas and in India) as per the bank's Customer Identification Policy.
A recent passport-sized color photograph.
For PIO (Person of Indian Origin):
A valid Indian passport.
A valid PIO/OCI card or any other proof of PIO status as per the bank's Customer Identification Policy.
Proof of Address (Both Overseas and in India) as per the bank's Customer Identification Policy.
A duly signed and filled-in PIO declaration.
A recent passport-sized color photograph.
Nomination and Joint Account Features
Nomination: Union Bank of India offers a nomination facility for its Union Bank NRO Fixed Deposit. This feature allows depositors to nominate an individual who can claim the deposit amount in the event of the depositor's demise. The nomination ensures a smooth transition of the deposit amount to the nominee, eliminating potential legal hassles.
Joint Account: The Union Bank NRO FD can be opened as a joint account. This provides flexibility for NRIs who wish to share the account with another individual. The joint account can be held with both residents and non-residents. If the account is jointly held with non-residents, the operation mandate can be chosen by the account holder. However, if the joint account is with resident Indians, the co-holder should be a close relative as per RBI guidelines. The operational mandate for such accounts is strictly "FORMER OR SURVIVOR," ensuring clarity in account operations.
Tax Implications and Repatriation of Funds
Interest earned on the Union Bank NRO FD is subject to Tax Deducted at Source (TDS). The standard TDS rate on interest earned from NRO deposits is 30.90%. However, if the interest amount paid exceeds Rs.10 lakhs, the TDS rate increases to 33.99%.
For NRIs hailing from countries that have a Double Taxation Avoidance Agreement (DTAA) with India, a lower TDS rate may apply. It's advisable for depositors to check the specific DTAA provisions for their respective countries to benefit from reduced tax rates.
One of the significant advantages of the Union Bank NRO FD is the repatriation feature. While the principal amount in the NRO FD is not fully repatriable, the interest earned on the deposit can be transferred to a foreign currency. This feature is particularly beneficial for NRIs who wish to send their earnings back to their home country. The interest is repatriable net of applicable tax. The principal amount can also be repatriated under specific circumstances, but it's subject to the payment of applicable taxes.
Union Bank of India's NRO Fixed Deposit offers a robust and reliable financial solution for Non-Resident Indians (NRIs) and Persons of Indian Origin (PIO). With competitive interest rates, flexible tenures, and a host of features tailored to the unique needs of the NRI community, it stands out as a preferred choice for those looking to grow their savings in India. Whether it's the repatriation of interest, the nomination facility, or the provision for joint accounts, Union Bank ensures that its NRO FD caters to every requirement of its global clientele.
FAQs
What is the minimum amount required to open a Union Bank NRO FD?
The minimum deposit amount is Rs. 10,000 for Metro and Urban branches and Rs. 5,000 for Rural and Semi-urban branches. For senior citizens, it's Rs. 5,000 across all branches.
Can I open a joint NRO FD with a resident Indian?
Yes, the NRO FD can be jointly held with both residents and non-residents. If held with a resident, the co-holder should be a close relative as per RBI guidelines.
Is the interest earned on the NRO FD repatriable?
Yes, the interest earned on the deposit can be transferred to a foreign currency, net of applicable tax.
How often is the interest paid on the NRO FD?
Interest is paid on a quarterly basis. If the interest payment date falls on a holiday, it will be paid on the next working day.
Are there any tax benefits associated with the Union Bank NRO FD?
Interest earned is subject to TDS. However, NRIs from countries with a DTAA with India might benefit from reduced tax rates.
Can I prematurely withdraw my NRO FD?
Yes, premature withdrawal is permissible. However, the interest will be paid at the rate applicable on the deposit date, and a premature closure penalty might apply.
Is there a nomination facility available for the NRO FD?
Yes, Union Bank offers a nomination facility for its NRO Fixed Deposit.
How long can I keep my funds in the NRO FD?
The tenure for the NRO FD ranges from a minimum of 15 days to a maximum of 10 years.
How is the interest calculated for deposits below 6 months?
For deposits below 6 months, simple interest is applied.
Can I manage my NRO FD online?
While the provided data doesn't specify, most banks, including Union Bank, offer online platforms for account management. It's best to check with the bank directly for online services.
Tejas is an accomplished Chartered Accountant with a passion for finance. With a decade's worth of extensive experience in the banking and credit domain, he has a deep understanding of the financial landscape across consulting and start-ups. In his time away from work, Tejas enjoys sharing his knowledge and helping others understand the intricacies of this complex domain.
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