The Modi government’s Rs 25,000-crore bonanza for the real estate sector will help complete over 1,600 stalled housing projects in India, including the ones that

Do Indians in the US save large amounts of cash (approx. Rs. 1 crore) in India to get a good interest rate? If yes, how do they transfer this money back to the US when needed (e.g. to buy real estate)?

Yes , as an Indian residing in USA ( assuming that he is legally working with necessary valid Visa status) he/she will be treated as a Non Resident Indian ( NRI)..

There are specified guidelines and rules laid down by RBI to Banks for accepting deposits, pay applicable interest and allow repatriation as and when needed.

If the foreign currency received is connverted to indian rupees and placed in NRO ( Non Resident Ordinary ) accounts ( fixed or savings), the interest paid is usually higher.

The downside is that these interest payments are subject to TDS ( Tax Deducted at Source ). Also the Exchange rate may adversely affect if the Rupoe had weakened in the intervening period.

On the other hand if the foreign currency so received is placed on deposits in the SAME currency called FCNR ( Foreign Currency Non Resident) accounts , the rate of interest paid will be almost on par or just slightly higher than what one would get on deposits in banks abroad – say USA in the instant case.

There will be no tax deducted at source and the proceeds – principal plus interest – can be freely repatriated without any hassle. But note that you are not getting any great good interest in this format!