Investment in Fixed-Time Deposits with Nationalized Banks in India

The rates of interest on any type of the investments in the banks in the USA are only around 3% to 4% at present, even for CD. Hence, it becomes utmost difficult to earn more interest on the savings made by you. This would erode all your investments over a period due to high inflation rate that is being observed all around the world recently. If you are Indian citizen and the USA residents, holding green cards, some attractive options in profitable investments in India are available for you. One such most attractive option is to invest in the fixed deposit in the Indian nationalized banks for some fix period of time. This option can easily fetch you the compound interest of around 9.5% annually. If you are more than 60 years of age, additional half a percent interest is also offered to you as a senior citizen.

This investment in fixed time deposits must be made in nationalized banks and the most well known banks only. There are thousands of cooperative banks available in India that offer very high interest rate of around 12% to 13%. Your investment may not be safe in such small family oriented banks. Hence, first vital aspect is to avoid investing in such small cooperative banks. The best bank to invest is State Bank of India, which is the most renowned nationalized bank. All other nationalized banks like Bank of Baroda, Indian Overseas bank, Dena bank, bank of India, Central bank, and United bank of India can also be considered safe for investment. The fixed deposit interest rate varies from bank to bank. So, try to collect data on interest rates payable by all such banks and decide the bank offering high interest rate and convenient to you for making the investment. At present, the maximum interest rate of 9.5% is offered by the leading nationalized banks for the time duration of 1 year to 3 years. This is the most optimum range for your investment. If you invest for more or less period, the interest rate is less, to the tune of around 7% to 9%. The senior citizens above 60 years of age get half a percent more interest.

Once you decide on the amount and the time period for which you would like to invest, approach the bank you have selected for the investment. You need to fill in one simple form and deposit the money you would like to invest, either by check or cash. It is advisable to invest money in joint names, may be with your spouse or children or other relative on either or survivor basis. This would help to get the invested money back easily in case of death of one of the joint holders. You can either select to invest the money on cumulative basis, where the entire maturity amount is paid with interest at the time of maturity, or arrange to get the interest amount paid every month, every quarter, or after every six months. Such interests can be periodically deposited in your savings account in the same bank automatically and can be available to you during your visit to India. Such fixed deposits are renewed automatically for a further period of one year on same names and terms, in case you are not able to go to India and present the fixed deposit at the bank for further action.

The nomination facility is also available in case of this type of investment. The total interest earned on such deposits is fully taxable as per the taxation laws of India. However, the banks would not deduct any income tax at source if the interest income is within Rs.10000 per year per individual. Around 10% tax is deducted towards the income tax in case the interest amount exceeds Rs.10000 per year per individual. However, if you intimate to the bank not to deduct income tax at source in the prescribed form 15G or 15H in the beginning of the financial year, the bank would not deduct any income tax on the interest earned. However, you will need to settle this issue while filling the income tax return every year as the copy of the form 15G or 15H filled by you is forwarded to the tax authorities. There is no maximum ceiling of investment in this scheme. The investment also is very safe as the nationalized banks are in direct control of Indian government through Reserve Bank of India. Moreover, if you need the invested money back suddenly due to some adverse circumstances, the bank would pay the money almost immediately with the saving account interest rate of around 3%.

Such time deposit offers the maximum rate of interest at present in India and hence is the best option for investment for the Indian citizens who are the residents of the USA holding green cards in view of high interest rate and the liquidity offered by the banks. I would strongly recommend all my readers to consider this most profitable option of investment in India.