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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.

  • NRE Rupee Term Deposits - To avail of higher rate of interest.
  • FCNR (B) Term Deposit - To safe guard from exchange rate risk.

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:

  • Earn higher returns in foreign currency as compared to FCNR (B) deposit.
  • Protects against exchange loss.
  • Interest earned is totally free from Indian Income Tax (as per existing norms).
  • Maturity proceeds (both principal + Interest) are freely and fully repatriable.

Who can open the account:

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.

  • All rules relating to NRI deposits viz. Joint Accounts, Nominations, Additions / Deletions of names, Interest application etc are the same as applicable to NRE Term Deposits.
  • No premature extension is permitted.
  • No credit facility or loan/overdraft is permitted.
  • Premature withdrawal of the deposit will not be permitted. Under exceptional circumstances (to be decided by the branch head), if premature withdrawal is permitted then the depositor will be required to bear the losses both by way of penalty for premature closure and on account of cancellation of forward contract in addition to other charges / fees incurred by the bank. However, gains, if any, made by the bank on account of cancellation of forward contract will not be passed on to the depositor.