Sunday, January 22, 2012

Comparison of NRE Fixed Deposit Interest Rates of Banks

rest rates on Non-Resident (External) Rupee (NRE) Term Deposits have been deregulated by Reserve Bank of India on 16-12-2011. After the deregulation almost all the banks have hiked their interest rates on Non-Resident (External) Rupee (NRE) Term Deposits in December 2011/ January 2012.
A comparison of Non Resident (External) Rupee Term Deposit Account (NRE) Interest Rates of Banks for an amount of below Rs. 1 crore (Updated as on 04-01-2012) is as under.   (For more details click on the respective Name of the Bank)
Sr. No.Name of the Bankw.e.f.Tenor/Period ROI
Public Sector Banks
1Allahabad Bank04-01-20121 Year to < 2 Years9.50
2 Years to < 3 Years9.00
3 Years only8.75
2Andhra Bank01-01-20121 Year9.40
> 1 Year upto 2 Years9.25
> 2 Years upto 3 Years9.00
3Bank of Baroda29-12-20111 Year & above but < 2 Years9.25
2 Years & above but < 3 Years9.25
3 Years & above but < 5 Years9.00
4Bank of India01-01-20121 Year to < 2 Years9.00
2 Years to < 3 Years8.00
3 Years and above7.00
5Bank of Maharashtra01-01-20121 Year to < 2 Years9.00
2 Years to < 3 Years8.75
3 Years to < 5 Years8.75
5 Years to 10 Years8.50
6Canara Bank29-12-20111 Year & above to < 2 Years9.25
2 Years & above to < 3 Years9.25
3 Years & above to < 5 Years9.25
5 Years & above to 10 Years9.00
7Central Bank of India01-01-20121 Year to < 2 Years9.25
2 Years to < 3 Years9.00
3 Years only8.75
8Corporation Bank30-12-20111 Year to < 2 Years9.50
2 Years to < 5 Years9.25
9Dena Bank23-12-20111 Year only9.60
> 1 Year to < 2 Years9.25
> 2 Years to < 3 Years9.25
3 Years only9.25
10Indian Bank  @28-12-20111 Year & above to < 2 Years9.50
2 Years & above to < 3 Years9.50
3 Years & above & upto 5 Yrs9.00
11Indian Overseas Bank01-01-20121 Year to < 2 Years9.25
2 Years to < 3 Years9.25
3 Years to < 5 Years9.25
12Oriental Bank of Commerce02-01-20121 Year to < 2 Years9.75
2 Years to < 3 Years9.25
3 Years to < 5 Years9.25
5 Years only9.25
13Punjab & Sind Bank02-01-20121 Year to < 2 Years9.50
2 Years to < 3 Years9.25
3 Years & upto 5 Years9.25
14Punjab National Bank01-01-20121 Year to < 2 Years9.25
2 Years to < 3 Years9.25
3 Years to 5 Years9.25
15Syndicate Bank29-12-20111 Year & above to < 2 Years9.35
2 Years & above to < 3 Years9.35
3 Years & above upto 5 Years9.25
16UCO Bank #02-01-20121 Year to < 2 Years9.50
2 Years to < 3 Years9.25
3 Years to upto 5 Years9.25
17Union Bank of India27-12-20111 Year to < 3 Years9.25
3 Years to < 5 Years8.75
5 Years & above8.50
18United Bank of India02-01-20121 Year to < 2 Years9.25
2 Years to < 3 Years9.25
3 Years to upto 5 Years9.25
19Vijaya Bank01-01-20121 Year to < 2 Years9.25
2 Years to < 3 Years9.00
3 Years to < 5 Years9.00
5 Years & above8.75
SBI & Associates
20State Bank of Bik & Jaipur01-01-20121 Year & above to < 2 Years9.50
2 Years & above to < 3 Years9.50
3 Years to 5 Years9.50
21State Bank of Hyderabad03-01-20121 Year to < 2 Years9.40
2 Years to < 3 Years9.25
3 Years & upto 5 years9.25
Above 5 Years & upto 10 Years9.25
22State Bank of India01-01-20121 Year to < 2 Years9.25
2 Years to < 3 Years9.25
3 Years to < 5 Years9.25
5 Years to upto 10 Years9.25
23State Bank of Mysore04-01-20121 Year & above but < 2 Years9.50
2 Years & above but < 3 Years9.25
3 Years & above upto 5 Years9.25
5 Years & above upto 10 Years9.25
24State Bank of Patiala1 Year & above to < 2 Years
2 Years & above to < 3 Years
3 Years & above upto 5 Years
25State Bank of Travancore01-01-20121 Year to < 2 Years9.50
2 Years to < 3 Years9.50
3 Years & above upto 5 Years9.25
Private & Foreign Banks
26Axis Bank $04-01-20121 Year & above to < 2 Years9.00
2 Years & above to < 3 Years9.00
3 Years & upto 5 Years8.50
5 Years & upto 10 Years8.50
27Dhanlaxmi Bank26-12-201112 Months to < 24 Months8.00
24 Months to < 36 Months8.00
36 Months to upto 10 Years7.75
28Federal bank01-01-20121 Year only9.50
Above 1 Year to < 3 Years9.25
Above 3 Years8.75
29HDFC Bank04-01-20121 Year7.25
1 Year 1 day to 1 Year 15 Days9.00
1 Year 16 days9.25
1 Year 17 days to 2 Years8.50
2 Years 1 day to 2 Years 15 Days8.50
2 Years 16 days9.25
2 Years 17 days to 3 Years8.50
3 Years 1 day to 10 Years8.25
30ICICI Bank 29-12-20111 Year to 389 days8.25
390 / 590/ 790/ 990 days9.25
391 days to 589 days8.25
591 days to < 2 Years8.25
2 Years to 789 days8.50
791 days to 989 days8.50
991 days to < 3 Years8.50
3 Years to 10 Years8.75
31IDBI Bank28-12-20111 Year9.25
1 Year 1 days to 10 Years9.50
32ING Vyasa Bank  %31-12-2011365 days8.75
366 days9.50
367 days to 500 days9.50
501 days to 1095 days9.25
1096 days to 5 years9.00
33J & K Bank31-12-20111 Year to < 2 Years9.25
2 Years to < 5 Years9.50
5 Years to 10 Years9.00
34Karnataka Bank19-12-20111 Year to < 2 Years9.75
2 Years to < 3 Years9.50
3 Years & upto 5 Years9.50
35Karur Vyasa Bank24-12-20111 Year to 2 Years10.00
Above 2 Years to 3 Years9.75
Above 3 Years9.50
36Kotak Mahindra Bank27-12-20111 Year to < 2 Years9.25
2 Years to < 3 Years9.00
3 Years to 5 Years8.50
37Laxmi Vilas Bank22-12-20111 Year to < 2 Years10.00
2 Years to < 3 Years8.00
3 Years & above7.00
38South Indian Bank02-01-20121 Year to 2 Years9.50
Above 2 Years9.25
39Yes Bank23-12-20111 Year to < 3 Years9.00
3 Years & above8.75
15 Month 15 Days to 16 Months9.60
@ Indian Bank – These rates are applicable for deposits less than Rs. 15 lacs only. For deposit of an amount of Rs. 15 lacs & above upto Rs. 5 croes interest will be 0.25 % lesser for periods less than 3 years.
# UCO Bank – These rates are applicable for deposits of Rs. 15 lacs & above. For deposits less than Rs. 15 lacs interest will be 0.50 % less for all maturities.
$ Axis Bank – These rates are applicable for deposits of Rs. 15 lacs & above. For deposits less than Rs. 15 lacs interest will be 6.50 % for all maturities.
% ING Vysya Bank – These rates are applicable for a deposit of Rs. 15 lacs to < Rs.100 lacs. For deposits upto Rs. 15 lacs ROI will be 0.25 less for 365 days maturities and 0.50% less for all other maturities.
Wishing You Happy Investing.
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Wednesday, January 18, 2012

The difference between NRE and NRO accounts


There are two options an NRI interested in opening a bank account in India can choose from – an NRE or an NRO account. Are you an NRI keen on getting a bank account opened in India? Then it would be advantageous to know how these two types of accounts differ and which one is right for you.
 
The Government of India has permitted NRIs to open rupee accounts in India in order to repatriate funds from their home countries. The two most common accounts are the NRE and NRO accounts. Let’s take a closer look at them.
 
What’s an NRE account?
A Non-Resident External (NRE) account is a bank account that’s opened by depositing foreign currency at the time of opening a bank account. This currency can be tendered in the form of traveler’s checks or notes.
 
What’s an NRO account?
A Non-Resident Ordinary (NRO) account is the normal bank account opened by an Indian going abroad with the intention of becoming an NRI. An NRI can also open this account by sending remittances from his home country or by transferring funds from his other NRO account. It offers the same facilities as an NRE account, except that any repatriation done through this account should be reported to RBI by filling up prescribed forms.
 
How do NRE and NRO accounts differ?
Funds remitted from overseas sources or local funds that would otherwise have been sent to the accountholder abroad can instead be transferred to NRE Accounts. On the other hand, local funds that aren’t eligible to be remitted abroad must be credited to an NRO account.
 
Can you transfer funds fromanNREto anNROaccount and vice versa?
It’s easy to transfer funds fromanNREto an NRO account. But it’s not possible to transfer funds from an NRO account to an NRE account. Once you transfer funds fromanNREtoanNRO account, the amount is non-repatriable. Consequently, you cannot transfer it back.
 
What’s the difference in the tax treatment for interest earned on an NRE and an NRO account?
The interest earned on any type of NRO bank as well as the credit balances in this kind of account are taxed under the account holder’s tax bracket. On the other hand, interest earned on the NRE account is totally exempted from income tax, and the credit balances in the account don’t attract any wealth tax. Any gift given to a close relative doesn’t attract gift tax.
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Banking in India: fixed deposit options

Are you a person who is averse to taking risks when it comes to making investments? Afraid to risk your money on stocks and too busy to track a mutual fund portfolio? Have some spare cash and want to keep it liquid but wouldn’t mind some interest on it?
If you answered ‘yes’ to any of the questions above then Fixed Deposits (FDs) are an option you could consider. As an NRI / PIO, you can opt for fixed deposit schemes in almost all private and nationalized banks in India.
RBI Directives
The Reserve Bank of India has prescribed time limits for which FDs / term deposits can be made.
  • Foreign Currency (Non-Resident) Account (Banks) Scheme (FCNR (B) Account) – 12 months to 60 months.

  • Non-Resident (External) Rupee Account Scheme (NRE Account) and Non-Resident Ordinary Rupee Account Scheme (NRO Account) – Duration is at the sole discretion of the bank offering the deposit scheme.
Banks generally do not pay any interest if these fixed deposit accounts are closed before the 12-month period.

Types of FDs

The minimum amount you would require to open a fixed deposit account is USD 600. You can choose from two types of FD accounts:
  • SPECIAL TERM DEPOSITS: The earned interest is added to the principal and compounded quarterly. This amount is accrued and repaid along with the principal amount on maturity of the deposit.

  • ORDINARY TERM DEPOSITS: The earned interest is credited to the investor’s account, held with the bank or in a bank account of his choice, once a quarter. In specific cases, interest may be credited on a monthly basis. However, this is at the sole discretion of the bank in which the deposit is made.
The interest rate on these fixed deposits is very high and is compounded on a quarterly basis. Also, the earned interest amount is exempt from income tax.
It is possible for you to get loans against fixed deposits as well. However, these loans are provided subject to restrictions on the use of the deposited funds. The interest rate applicable to loans against FDs ranges between 7% and 10.5%.

Special FDs

If you hold a Non Resident (Special) Rupee (NRSR) account, you can make an FD for any period ranging from 15 days to 10 years. However, the interest rates applicable to the deposits will be the same as those offered to resident investors. Further, the principal amount and the interest earned on the deposit will be non-repatriable and the interest earned will be subject to tax deducted at source by the banks.
 
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Why residential property prices never fell in cities

The last time Bharat Sharma went looking for a house that fit his budget of Rs 40 lakh was in January 2011. Prices were high then and so were interest rates.

The same month, he came across reports about a possible correction in property prices in the next one year.

The arguments were compelling. Property prices and interest rates were high, making EMIs unaffordable. Income growth had slowed down, job creation was on the wane, inflation was high and there was oversupply in the market.

With everything pointing to property prices coming down, Sharma decided to wait. He is now back in the market looking for a property, with a slightly higher budget (Rs 42 lakh).

But contrary to his expectations, prices have not gone down. In fact, they have risen. "The project that I was considering is now sold out and the others launched recently in the same locality are quoting at higher prices," he says. Why did property prices defy what the market pundits were expecting? What prevented them from falling?

Continuing investor interest

Investors are the lifeline of a cash-strapped developer. They are the ones who are keeping builders afloat even now.

Pankaj Kapoor, managing director of real estate research firm Liases Foras, explains that compared to 1995, when there was shortage of liquidity in the market which led to a crash in the real estate sector, the situation now is quite different. "There are hardly any avenues which offer you safe returns today.

The stock markets are volatile and gold prices are also at an all-time high. So, investors look at the real estate sector to park their excess funds. It is not the developers who would have to take a price cut but the investors," he adds. According to Kapoor, it is the investors who are instrumental in the property prices staying firm.

"Besides this, there are a lot of venture capital firms which have bought huge stakes in realty projects. For the developers, it is a win-win situation. Since they have already cut down on their losses, they won't be losing much even if the rates come down a bit," he adds.

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However, in some cases it is also because of these investors that the builders cannot reduce prices substantially. "A big investor who puts in money at the pre-launch stage of the project is also looking to exit at a higher rate later," says a Gurgaon-based real estate broker. "If the developer reduces the ticket price, the investor will not be able to sell his properties in the market and, therefore, will not invest in the builder's projects in future," he says.
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Gilt funds get the edge on RBI rate cut hopes


Gilt funds are turning popular with investors once again amid signs that the Reserve Bank of India will ease its monetary policy at its next review. Net inflows in gilt funds turned positive at 458 crore in December after a year, according to monthly data released by Association of Mutual Funds of India. Their assets under management went up to 3,121 crore in December from 2,663 crore in the previous month.

"Fresh investments in gilt funds indicate that market is expecting interest rates to come down," says Deepak Panjwani, head of debt markets at GEPL Capital. Gilt funds invest in government securities, which are considered ideal instruments to ride interest rate cycle because they carry little risk of default. If interest rates fall, bond prices go up and, in turn, push up the net asset value (NAV) of the gilt fund.

The RBI has hiked interest rates 13 times since March 2010, pushing up the repo rate to 8.5%. Rising interest rates deter investment in long-term bonds, whose prices move downwards with every rise in interest rates.

In the December quarterly monetary policy review, the RBI paused its rate hike cycle. The market interprets this as a change in the central bank's stance from hawkish to neutral. "We expect interest rates to come down by 100 basis points over next six months," Panjwani said.

Market players have started discounting the future well in advance. The benchmark 10-year bond yield is on the way down. The yield came down 34 basis points to 8.22% on January 12 from 8.56% on December 30, benefitting gilt funds.

According to Morningstar India, a mutual fund tracker, long-term gilt funds delivered an average return of 2.09% against 0.87% posted by short-term bond funds over last one month. This is a trend reversal. Short-term bond funds and liquid funds outperformed gilt funds when rates were rising.

"The average maturity of long-term government bond funds has risen to 8.7 years compared with 4.5 years in January 2011," says Dhruva Raj Chatterjee, senior research analyst at Morningstar. NAV of gilt funds with high average maturity should move up faster than their counterparts with low average maturity if rates fall and vice versa.

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