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Under the present NRE deposit scheme, if an NRI needs funds, he has the following options:
- To raise a loan against pledge of deposit @ 2% ODR or at interest rate stipulated from time to time.
- To close the deposit before maturity.
- Premature closure of deposit entails loss of interest on the entire deposit, if the deposit has not run for minimum maturity period of 12 months.
- If deposit has run for a period of 12 months or more, the NRI depositor is entitled to interest at the rate applicable for the period the deposit has actually run, subject to penalty of 0.25%.
Both the above options involve a cost to the depositor either in the form of interest payable on loan or loss of interest on deposit. To mitigate these difficulties, the Union Unfixed Deposit Scheme was introduced, which facilitates withdrawal in units of deposits without affecting the interest due on the subsisting (continuing) portion of the deposit.
IMPORTANT FEATURES OF THE SCHEME
ELIGIBILITY
Non Resident Indians of Indian nationality or origin.
AMOUNT OF DEPOSIT
Minimum Rs. 10,000/- or more in multiples of Rs. 5,000/-
Deposits under the scheme will be sub-divided into units of Rs. 5,000/- each. Every unit will be treated as a separate deposit. Details of units will be mentioned on the face of the deposit receipt.
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