Potential of 7.50% Interest for up to 3 Year Term Deposit in India Non-Resident Account - State Bank of India

[Deactivated] on 14/02/2016 - 05:28
Last edited 14/02/2016 - 12:19 by 2 other users

Moved to Forum: Original Link
[Requested by OP/Not available to Australia]

It looks as though you can open a State Bank of India account from anywhere in the world and get better interest (7.5%) on deposits.

I don't know enough details about this, but thought I'd pass it on to you guys to look into as it looks good.

Interest rate for SAVINGS ACCOUNTS is only 4%

Other links -
http://www.sbisyd.com.au/Deposits_Service_Info.html
http://www.deposits.org/world-deposit-rates.html

I read the bank is majority government owned, largest in India, and its origin dates back to 1806. And now are in Oz (3.4% interest)

Financial

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Comments

  • [Deactivated] on 14/02/2016 - 05:43
    +9

    What are the tax implications?

    I think I'll just keep my Isle of Man and Swiss accounts at this stage but will investigate further.

    • ets27 on 14/02/2016 - 10:58
      +3

      Can I ask you What is the average interest to expect from a Swiss bank account?

      • [Deactivated] on 14/02/2016 - 12:57
        +5

        Swiss banking laws prevent him from divulging.

      • Repi on 15/02/2016 - 21:22
        +1

        It's currently 0.01%, account Balance has to be over CHF 50,000.-, otherwise a monthly account keeping fee of between 50.- to 236.- applies (Standard account for non residents)

  • cryptowiz on 14/02/2016 - 06:00
    +1

    As I understand it, non-resident investment income in India attracts 20% withholding tax

  • duchong on 14/02/2016 - 06:13
    -1

    Better if u buy Aust bank shares. Higher returns if u include franking credits and lot safer.

    • RockyRaccoon on 14/02/2016 - 08:38
      -1

      First, consider this, like all shares it depends on when you buy. If bought last year many would disagree with you.

      From the Motley fool published 3 days ago

      Take Commonwealth Bank of Australia (ASX: CBA), its share price has fallen 20% over the last 12 months. It’s fallen 23% since peaking in March, putting it in official bear territory, and it is trading 13.5% lower since the beginning of 2016 at $73.95.

      That’s not all – each of its major peers are also trading in bear territory: Westpac Banking Corp (ASX: WBC) has fallen 27.6% from its peak, while National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) are trading 37.2% and 39.1% below theirs, respectively.

      http://www.fool.com.au/2016/02/11/the-commonwealth-bank-shar…

      Lets hope you aren't considering a job as a financial advisor. Even taking Franking Credits into account, its not been a good investment

      • [Deactivated] on 14/02/2016 - 09:46
        +1

        I hope you're not in the financial advisory iondustry either.
        First rule of investing Past performance is not a reliable indicator of future performance.
        Then again I'm not sure that I'd be taking advice from fool.com.au

        Back to the deal they're not even close to being the best term deposit rate in India.
        https://www.bankbazaar.com/fixed-deposit.html

        • RockyRaccoon on 14/02/2016 - 11:40

          Of course nothing can be a "reliable" indicator.

          Likewise no financial advisor or anyone else can claim to know either. BTW even if they had a crystal ball, they wouldn't share the info with plebs at Ozbargain would they?

          The only point I was making was that investing in Australain Bank shares as duchong says have shown have NOT given Higher returns over the past year as they claim.

          By no means was I trying to infer that investing in Indian Bank TD is an alternative better investment.

          And on a personal note I would touch this deal for various reasons

        • RockyRaccoon on 14/02/2016 - 19:08

          and for those who dont like the fools comments try the SMH from today instead

          http://www.smh.com.au/business/banking-and-finance/banks-gri…

          Says the same thing. Bank stocks down. No point getting dividends when your suffer capital loses greater than the dividend

        • BestofOZB on 16/02/2016 - 00:30

          @RockyRaccoon:
          Indicators for interest rate (100%), look at the variable and short fixed rates of major banks, fixed is lower rates will go down, fixed is higher rates will go up, only thing is by how much.

        • Brianqpr on 16/02/2016 - 09:01

          That depends. If you don't need to access the capital then its fine. You can ignore the shorter term price fluctuations and receive the dividends, maybe even reinvest them at the lower share price. Losses only become real when you sell. If you don't need to sell them no problem, prices will probably come back eventually.

          Also the losses referred to have already happened. These shares are now available at a much lower price than a few months ago.

        • [Deactivated] on 16/02/2016 - 10:12

          @Brianqpr: also there's 366+ days 50% capital gains discount.
          Also capital losses can be offset against future capital gains. IMHO The big four Aussie banks are a great investment, as they're not only highly regulated, the Fed Govt has decided they're too big to fail. So if they did go belly up, you'll have much bigger problems then losing your money.

          IMHO CBA & Wespac are well run & great investments. NAB &ANZ whilst often misamanged over the years, still make a good investment with great returns.

      • Brianqpr on 16/02/2016 - 08:57

        Your post actually makes a very good case for buying these stocks.

        • RockyRaccoon on 16/02/2016 - 11:32

          That may well be.

          The problem is that by raising the point that these stocks have been hit hard over the past year, a number think that I am saying its not a good investment NOW

          I was just saying it hasnt been so in the past 2 or so years.

          With Hindsight we will all know the truth :)

  • easternculture on 14/02/2016 - 06:18
    +1

    It looks as though you can open a State Bank of India account from anywhere in the world and get better interest (7.5%) on deposits.

    You can also get 9% in Serbia

    I read the bank is majority government owned, largest in India

    I read that the majority of corruption in India is in the government sector

    • RockyRaccoon on 14/02/2016 - 08:43
      +1

      While I dont agree with many of your posts, your advice is worth considering. Voting down advice like this is being stupid. Investing requires looking at all aspects to make an informed decision.

      At Ozbargain, voting down a comment can hide it from view, its not a popularity contest. Thats why I voted this comment up to balance the opinions people need to look at in important decisons like this

    • mrtin on 14/02/2016 - 11:11

      http://russia.deposits.org/deposits/
      Russia nearly 11% on deposits!

      • ca4cpa on 15/02/2016 - 11:12

        This rate is for residence of Russia.

      • pechorsky on 16/02/2016 - 07:04

        This rate for deposits in Russian currency.

  • shmahoo on 14/02/2016 - 07:14
    +9

    Welcome to OzSpeculation !

  • [Deactivated] on 14/02/2016 - 07:21
    +2

    Time to borrow some JPY … invest it in INR … carry trade. cha-ching.

    What could possibly go wrong?

    • choister on 14/02/2016 - 08:22
      -1

      How do you actually borrow in JPY? What's the process? Very interested.

      • [Deactivated] on 14/02/2016 - 08:41

        Have a look at some forex trading services. They should pay you interest on long positions. I haven't looked at it recently though.

    • Gershom on 14/02/2016 - 08:58

      I see you lived through the 80's too. So many people got burned with that.

      • T-man on 16/02/2016 - 10:10

        I also want to know how to borrow JPY, could you pm me the process? Thanks.

    • [Deactivated] on 15/02/2016 - 16:21

      Are you hoping they pay you 0.1% for borrowing in Japan?

  • seijai on 14/02/2016 - 07:32
    +2

    And the foreign exchnage for rupiah in 1 yr will be?

    • miarn on 14/02/2016 - 08:50
      +13

      Rupee*

      Rupiah is Indonesian :)

      • jv on 14/02/2016 - 09:46
        -7

        I thought it was Rupert

        • Peck on 14/02/2016 - 10:29
          +9

          That's USA

        • wako on 15/02/2016 - 17:05
          +1

          no he owns the newspapers

      • NBAD25 on 15/02/2016 - 23:15

        Shots fired.

  • coldmyst on 14/02/2016 - 07:42

    Got to look exchange rate risk and what is the real interest rate after taken into consideration inflation.

    • [Deactivated] on 14/02/2016 - 08:09
      +4

      but it went so well for Westpac & the farmers in the 80's

      • holdenmg on 14/02/2016 - 09:14

        I was quite happy until you reminder me of Partnership Pacific. lol

  • rambokid on 14/02/2016 - 07:49
    +14

    EC, please don't compare Serbia to India. You are being naive if you think they are on the same plane. And the corruption is no worse than China or other South East nations..

    Stare bank of India is a huge bank, as big as or bigger than ANZ bank. They are govt controlled and very safe to keep your deposits in. Indian banks are well capitalised and particularly so for the govt controlled banks. They have branches all over the developed world - New York etc..

    Duchong, can't compare shares with FDs. There is a cost to risk free income.

    Seijai, there is definitely a forex exchange risk if the deposit is rupee-denominated. (not rupiah) .. Thankfully the rupee is not artificially controlled by the govt, unlike the yuan.

    Please get your facts right. I think this is a great opportunity for those who like FDs.

      • rambokid on 14/02/2016 - 08:01
        +6

        Again EC don't be naive. You can't compare india to Argentina. You need to learn about the subject and related issues before hitting the keyboard. The indian rupee is a strong and stable currency.

        A deposit in SBI is as good as a deposit in ANZ bank. That is the real comparison if you are looking from the perspective of a deposit holder.

        • [Deactivated] on 14/02/2016 - 08:14
          -4

          Yeah EC, the money goes into funding more quality and community service call centres. When was the last time some Argie called you up to offer you cheap education, offer to fix your virus riddled PC, a better Telstra deal, cheap solar panels, change your lights over.

          Even better when ever they call up and ask for payment at the end of the call, you can say "Hey how about I send you a cheque from my Bank Of India account!"

        • rambokid on 14/02/2016 - 08:14
          +6

          @easternculture:

          Mate please

          India is not a totalitarian country like China. It's your money and your choice of course, but I seek to dispel the prejudices that are being exhibited here.

        • GameChanger on 14/02/2016 - 13:40

          @rambokid: A bank in India is far safer than China imo.

        • scorpiovegas on 14/02/2016 - 14:30
          +2

          I'm not saying SBI is bad, but I think the $250k government guarantee on Australian bank deposits makes ANZ a much safer bank. Unless India has something similar?

        • StewBalls on 14/02/2016 - 14:47
          +2

          @rambokid:

          India is not a totalitarian country like China…but I seek to dispel the prejudices that are being exhibited here.

          Sounds like you've got a few prejudices of your own there…you need to learn the difference between Authoritarian and Totalitarian for starters.

        • BeoWulf on 15/02/2016 - 14:00
          +2

          @rambokid: Im pretty sure easternculture is Lebanese if that matters.

    • whooah1979 on 14/02/2016 - 08:30

      sbi is ranked 152, while anz is 75.

      the gravy train is with chinese banks and the usa.

  • shmahoo on 14/02/2016 - 08:05
    +40

    I'll only invest in an Indian bank if they run their call centre in Australia

    • braddsey on 14/02/2016 - 08:15
      +8

      But Australian accents are so difficult to understand. That's a crazy idea.

      • garage sale on 14/02/2016 - 08:56

        they need to localise the accents to correspond to they suburbs they are canvassing …… Nth shore syndey vs western suburbs , etc. also better identify the demographic …. what suburbs can afford iPhones and which ones only android.

    • rambokid on 14/02/2016 - 08:16
      -8

      Ha ha ha LOL..
      Mate you really need to get real. Even our banks run their call centres outside the country!!

      • Xizor on 14/02/2016 - 08:24
        +1

        Not there retention teams ;) Even Hellstra still have that in Oz.

        • rambokid on 14/02/2016 - 08:28

          True. Not all functions have been outsourced.which is really great !!

          Some banks have set up offshore it centres in Bangalore.

      • moo on 15/02/2016 - 09:59
        +3

        Low on the sarcasm detector? Heh.

    • jzx100 on 15/02/2016 - 10:17

      Could you imagine the abuse the call centre in Australia would cop, "you pie munchers learn to speak Hindi" lol

  • kanad on 14/02/2016 - 08:38
    +6

    You cannot invest in the SBI account if you are not a Non Resident Indian (NRI). This term has a legal meaning of people who are citizens of India but temporarily leaving abroad. https://en.wikipedia.org/wiki/Non-resident_Indian_and_person…
    Also the AUD will ne converted to INR and hence there is an exchange rate risk as well when it is time to withdraw. There is another kind of account called FOREIGN CURRENCY NON-RESIDENT DEPOSITS (FCNR) where the money can be kept as AUD but the interest rate is 3% or thereabouts.

    • [Deactivated] on 14/02/2016 - 09:50

      Ops updated with links for non-resident a/c.

  • LoungeLizard on 14/02/2016 - 08:39
    +3

    In the last year the AUD/INR exchange rate fluctuated by more than 8%. Also be aware if issues with moving money into/out of the country and taxation. Overall, not worth the extra ~4% that you gain in interest IMO

    • garage sale on 14/02/2016 - 09:01

      the prime minster should share his insights …. must be some reasons he parks his wealth off shore instead of in australia, and probablly a more "innovative" structure then just a person savings / investment account.

  • lgacb08 on 14/02/2016 - 08:54

    Interest rate is non-sense without factoring in inflation rate, any of these third world countries will have exhorbitant inflation rate to make their growth rate appealing to investor, so unless this rate apply to USD, AUD or EUR then it'll be worthless.

    Heck 4 year ago Ubank interest rate was around this, and you get paid in AUD, which was higher than USD at the time.

    • Mad Max on 14/02/2016 - 09:46

      It is true that the interest rate you get depends from a lot of factors. Stability of the currency and of the bank being very big factors.
      Some banks will let you have deposits in different currencies and the interest you get depends from the currency because there is an exchange risk associated with it.
      It is a bit naive to put a very small currency like AUD in the same league of USD and EUR.

      • lgacb08 on 14/02/2016 - 10:07

        Lol, you don't know that AUD is among reserve currencies used by world bank, which China just managed to achieve recently. I'd rate AUD higher than EUR, euro zone has been on the brink of collapse for a few years already and no one know when the next Greek default is happening. Resource has its up and down but over long-term it always go up in price.

      • Mad Max on 14/02/2016 - 10:37

        List by the International Monetary Fund (2014)
        GDP (Millions of US$):
        EUR 18,527,116
        USD 17,348,075
        AUD 1,442,722
        A lot of people in Australia think that Australia is a world power, but the truth is that Australia is a small fish in a very big pond…

        • lgacb08 on 14/02/2016 - 16:29
          -2

          GDP is just a number, using that number to make a statement about a currency is just plain naive. The EU is just a collective of old, worn down men trying to get together to make their voice heard when their prime time had long gone, look at the apathy to EU and the eurozone in rich Scandinavian countries, Switzeland and the UK to see it's not even that strong. The only good thing is about it is the 500 euro note that you can easily stash under your pocket to go past airport security when you don't want to declare your >$10000 and getting caught.
          I'm not even talking about your 'world power' grandeur here, currency is just a commoditive and what matters is how investors value them.

        • Mad Max on 15/02/2016 - 18:53

          @lgacb08:
          " GDP is just a number"
          LOL

  • CandyMan on 14/02/2016 - 08:59
    +2

    If its too good to be true its to good to be true

    In investment world the higher the risk the higher the return

    There's probably other risks that are not known to us.

    Ill take one for the team and neg the deal. Hopefully no naive investors will jump aboard and lose money

  • Gershom on 14/02/2016 - 09:03
    +2

    Not with a 40 foot pole, thank you. You can get a return of 17% in Oz on your portfolio. See how the super funds invest.

  • ilcattivo on 14/02/2016 - 09:47
    +5

    I am sure the state bank of Zimbabwe will give you better return… :)

  • [Deactivated] on 14/02/2016 - 09:54
    +1

    CitiBank in India are doing 7% (I'd trust them more).
    Standard Charter (British) 7.95%
    But the winner is Bassein Catholic Co-operative Bank with a mighty 9.25%
    Who better to trust your money with then the Pope!

    http://www.moneycontrol.com/fixed-income/banks-deposits/

  • jv on 14/02/2016 - 09:57

    Where is the Product Disclosure Statement (PDS) ?

    • CandyMan on 14/02/2016 - 12:03
      +1

      In India

  • ihbh on 14/02/2016 - 10:04

    Folks, remember, the higher the risk, the higher the expected return.

    Credit risk doesn't seem to be as high as some people make it out to be.

    However, don't forget exchange rate risk - see interest rate parity concept here: https://en.wikipedia.org/wiki/Interest_rate_parity

  • StewBalls on 14/02/2016 - 10:18
    +2

    I thought we'd hit the start of April early for a moment there.

    If only I hadn't just signed up with the State Bank of Nigeria…I trust them more though, psst the manager is a real Prince! ;)

  • jv on 14/02/2016 - 10:19
    +12

    I tried calling them about starting an account but they told me I had a virus on my PC.

    • Basslync on 14/02/2016 - 10:27
      +2

      Virus on PC or your self?? :)

      • StewBalls on 14/02/2016 - 10:44

        Which one would you be offering to remove?

        • King Tightarse on 14/02/2016 - 11:21
          +1

          He'd have to suck it out, like a snakebite in the old cowboy movies.

    • Nillionaire on 14/02/2016 - 22:19

      They are geniuses. Give your credit card details to them immediately, it'll all be good. Don't worry if it's expensive, you'll become a millionaire once you help the Nigerian Prince get his money out.

    • jee on 15/02/2016 - 13:30

      that must be you

  • Peck on 14/02/2016 - 10:32

    Just say that you wanted to do this and if India is the next 'boom'. How would you hedge the currency??

    • King Tightarse on 14/02/2016 - 11:22
      -1

      Or Pakistan make India go "boom" (always a possibility)

      • ltjaris on 14/02/2016 - 14:32

        Lol

      • Ahir87 on 15/02/2016 - 10:17

        When people are talking about Finance, growth and development, you commented about Pakistan…. LOL

        • King Tightarse on 15/02/2016 - 10:30

          Well, we are discussing investment risks. ;)

        • Ahir87 on 15/02/2016 - 10:44
          -1

          @King Tightarse:

          The OP has mentioned this is for NRIs.

          Here NON-NRIs are discussing if they have any risk without considering the big fact that it is not even available for them.

          Those who feel investment in INDIA is a risk should realise that their Superfunds are investing in INDIA!! So they are indirectly investors.

        • King Tightarse on 15/02/2016 - 11:24
          -1

          @nkdangar:
          Lol/

  • hawamahal on 14/02/2016 - 10:34
    +1

    The bank is inherently safe (there are other banks as safe as SBI which have better interest rates) and the money is not going to go anywhere. The only risk here is the exchange rate i.e. if the AUD appreciates against the INR, then you loose on the currency and also you will gain if the AUD depreciate against the INR.

    • StewBalls on 14/02/2016 - 10:44

      The only risk here is the exchange rate…

      Oh, and the fact that your money is offshore, where you are not protected by Australian banking legislation or regulation.

      • rambokid on 14/02/2016 - 10:55

        And you are assuming that India does not have investor protection laws ?

        • King Tightarse on 14/02/2016 - 11:24
          -2

          Well it certainly doesn't have beach environmental protection laws…
          https://www.youtube.com/watch?v=ixJgY2VSct0

        • [Deactivated] on 14/02/2016 - 11:35
          +1

          So what are they?
          Do they apply to foreigners?
          How do you obtain redress? Does it need to be in person?

        • dannyhc on 15/02/2016 - 10:09

          @King Tightarse:

          Some of those deposits are worthy of high marks on ratemypoo.com

        • King Tightarse on 15/02/2016 - 10:24

          @dannyhc:
          "India: just don't step in it"
          The Indian tourist board could promote their beach life AND do a public health & safey message all at the same time time.

      • hawamahal on 14/02/2016 - 10:59

        I understand that this is not covered by Australian Banking legislation/regulation, but that does not make the deposit unsafe. More than 99% of the banks in the world are not protected by Australian banking legislation/regulation, but that does not mean that all of them are unsafe.

        • StewBalls on 14/02/2016 - 11:49

          The bank is inherently safe…

          Well, I suppose we do have your assurance, backed by the security of internet anonymity…unless of course you're willing to personally underwrite the investments of everyone here! ;)

  • penfold25 on 14/02/2016 - 10:52
    +2

    Well CBA Australia has a subsidiary in India (CBA India) for 1 yr TD at 3.15% (AUD). I wouldn't consider CBA going bankrupt soon…..

  • RohBoat on 14/02/2016 - 11:05

    Hmmm, is this even available to us? In the links I can only see reference to NRI which is an Non Resident Indian, which is someone who is an Indian resident but doesn't live in India.

    Also, in the Sydney branch link it also says you need a minimum of AUD$20,000 to open your term deposit. This should be in the description.

    • [Deactivated] on 14/02/2016 - 11:41

      To the Ops credit, they've provided a link (the first one in their post) for Non Residental External Accounts (which I assume is open to all of us?)

      But I neg'd as there's much better Indian Term Deposit rates available.

      It's not a great rate considering the Indian Central (Reserve) Bank has official rates at 6.75%
      Oz is 2%, so it's like getting a term deposit here for 2.5%.
      http://www.cbrates.com

  • leosun on 14/02/2016 - 11:18

    some Chinese real estate investor give the 25% interest rate for years before 2015 Chinese economy slowing down .

    • Cluster on 15/02/2016 - 00:12

      If someone is paying way above average interest rates, chances are they are a very poor risk and likely to never return your money.

      Ezubao investors in China were getting between 9 and 15%pa, until it was revealed the whole scheme was a scam with 95% of projects being fake. 900,000 people lost over US$7 billion, and they're not happy.

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