The steady increase in Indian interest rates is making bank deposits a popular investment option among the Gulf-based Non-Resident Indians.
A 6.7 per cent risk-free return is indeed a good option, a local banker said adding that traditionally NRIs have kept more than 40 per cent of their savings in fixed deposits.
Though an increasing number of NRIs now have equity, mutual funds and real estate in their portfolios, a minimum of 20 per cent is kept in FDs, he said.
Even during the low interest environment, NRIs kept a substantial portion of their earnings in bank deposits.
In December 2005, NRI deposits accounted for 28 per cent of India's outstanding external debt, while multilateral organisations formed 26.8 per cent of the total debt.