NRIs often place their repatriable funds in the following term deposits with the banks either in Indian Rupees or in Foreign Currency with certain objectives.
However, both these schemes have inherent disadvantages. In case of NRE Rupee Term Deposit the depositor is exposed to possible exchange rate fluctuations though returns are comparatively higher. It is also possible that any advantage in rate of interest can be wiped out due to depreciation of rupee at the time of maturity/repatriation. In case of FCNR (B) deposit though depositor is guaranteed against adverse fluctuation of exchange rates, interest rates are comparatively low.
Therefore, as a better investment option for NRIs which not only ensures better returns but also insulate / mitigate exchange rate risk, the Bank has a deposit scheme with the name Union Smart Foreign Currency Scheme. This scheme gives better yields when the forward rates for Foreign Currency to Rupee are at a discount.
Advantages of the Scheme:
Who can open the account: NNRIs/PIOs/OCIs
Purpose:To enable the depositors to maximize the yield of the Foreign Currency Resources / funds.
Period of Deposit:Period of deposit will be for 12 months.
Minimum size of Deposit: USD 10,000 or its equivalent.
Rate of Interest As applicable to NRE Term deposit for 12 months.
Other Conditions: The Deposit should be placed under NRE-DRC Scheme only, to avail maximum benefit under this scheme.