Note : This post was written over 5 years ago, most of the content may not be relevant, please check the current rates and everything.
I have been sick lately and not been able to keep up with the blog. Sorry folks ! Anyways, if you are working and saving money in US, you might be saving up your money in a US Checking or Savings account. Most of us, want to accumulate a lump sum and then use it for a good cause to buy a plot or house in our home country. If you are sending your money directly every month to your savings account in India, you are doing a very good Job. But, in case you are not, you are losing interest on your savings…
Here is a quick comparison I compiled by research…
Interest Rates Comparison India
India Rates %
US Rates %
15 days to 45 days
46 days to 90 days
91 days to 180 days
181 days to less than 1 year
1 year to less than 2 years
2 year to less than 3
3 year to less than 5 years
5 years to less than 8 years
8 years and up to 10 years
Imagine, you keep $5000 in your savings account in US for one year, you get only 1% roughly and it is $50. and same thing if you send to India, you get 6.25% and it is roughly $312. So, You earn at least six times more if you save your money in India rather than saving up here. All you have to do is, every month when you send ask your banker to deposit it as a fixed deposit for 1 year. Worst case is you get at least 3 %.
Well, You can make a lot more money if you invest in stocks or give money on loan to your friends. But, there is risk…here there is NO Risk !
With rupee depreciating investing in India does not make sense if you somehow want to bring back the money in dollars
Imagine you would have sent 100000 rupees home at 60 INR/USD exchange rate in 2017 …You would have converted 1650 USD but just in 2 years rupee has depreciated so much that it is 72 rupees for a USD hence even with an interest of 7 percent when you bring back your money to US, you incur loss..
The way author has calculated is naive…over the years rupee has depreciated quickly and is expected to even depreciate more in coming years….Imagine a decade back USD to INR was hovering around 39-40 and now is at 72…Hence your money in india in INR depreciates faster than interest you get
Please see the first line, it is really an old post and may not be relevant now…
Hi, I am on H4 visa in US currently. Can i continue having my resident savings bank account in India, which i had prior to coming here? . My husband has his own nro account , so was wondering if can continue with my Indian account and if i can transfer money to my indian account from here? so i can invest in fds etc there. Basically looking for ways to save tax i guess.
Ps- Your blog is very informative. Thank you !
You should technically convert your resident savings account to NRE account. Couple of reasons, firstly you are not a resident…secondly, you will end up paying tax on your earnings from the deposits. If you are on NRE account, all earnings that you get from interest, FDs through NRE account will be tax free. You do not have to go to India to do this. You can do this via online and the banks send the application packet, etc. I know someone who have recently done it with YES Bank, without going anywhere. Just go to their website and sign up. It is the same case with HDFC, ICICI or any other bank.
Am sorry..but this particular blog is incredibly low on knowledge
When deciding whether to invest in India or keep money in the US one of the biggest factors is the exchange rate… & where u will need money
IN last 1 month the rupee has depreciated by 12% …so what it means is in case u needed the $ here , you would have lost 12% of ur money in 1 month…
this is an extreme example ..but if u look at past many years the rupee has steadily depreciated..this must be factored in
& also like someone else correctly pointed out…even tax free earning in India is taxable in the US
Can someone please suggest how NRI banking works? What are the banks that provide a good service? What are the charges associated? I am confused if Xoom or any other money transfers are better than NRI banking. Thanks for your advice.
I am replying to your other question here, as it is more relevant to this page.
I don’t know what the best way is as I haven’t explored much. The money you transfer from here to your parents can be treated as gift and doesn’t need to be taxed in India (still check w/ a CA there).
You can open a NRE/NRO account for yourself and transfer funds to those accounts and then from there take care of Indian expenses etc.
Informative article. The question that comes to my mind now is: The interest earned on Savings Account in India, it should be viewed as taxable income in US. What I mean is, I am assuming that any tax earned on a savings account at the end of the year should be reported for tx purposes to the IRS in the US. If I had a savings account in the US, this is what I would be doing? What is your opinion on this?
Wonderful!! Thanks a lot for the valuable info 🙂
Welcome Arjun !
This is a nice Blog, good wrk.
Thanks Munna !
Thanks Srikanth ! I have replied to your question as post : http://www.redbus2us.com/2009/12/is-fee-different-when-you-pay-than-what.html
hi admin……..ur blog is amazing for future students …..whose destination is usa …..my self srikanth applied for spring 2010 ..i choose siuc whose fee in i20 is 5lakhs per semerster..all my frds are sayin to wait for fall adn apply for low fee colleg …wht do u suggest ..fee in i20 is different ,when we pay to college .???is this true
Chaitanya, I have replied to your question check it :
Thanks ! Chaitanya, if I am not wrong, you are looking for a part time job on campus right ? correct me if I am wrong. I will do a post tomorrow. check back !
hello sir…i have read all the post written by you…it was amazing…i would like to know the details about how to find a part time job…i'm a student…coming to US in jan 2010…