Feature Post

Understanding ETFs Uses, Returns and Comparison with Mutual Funds and Stocks

 Exchange-Traded Funds (ETFs) have gained popularity among investors for their unique features and benefits. In this blog, we'll explore the uses of ETFs, their potential returns, how they differ from mutual funds and stock investments, and their safety profile. What is an ETF? An ETF is a type of investment fund that trades on stock exchanges, much like individual stocks. It holds a collection of assets, such as stocks, bonds, or commodities, and aims to track the performance of a specific index, sector, or asset class. Uses of ETFs Diversification : ETFs allow investors to gain exposure to a wide range of assets without having to purchase each individually. For instance, an ETF tracking the S&P 500 gives you exposure to 500 different stocks, reducing the risk associated with individual stock investments. Cost Efficiency : ETFs often have lower expense ratios compared to mutual funds. They typically pass on lower management costs to investors since they are often passively man
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Type of Accounts for Resident and Non Resident


Account can be opened by Residents.

  1. Residents Foreign Currency A/C
  2. Residents Foreign Currency Domestic A/C
  3. Exchange Earners Foreign Currency A/C

Account can be opened by Non Residents

  1. Foreign Currency Non Resident A/C
  2. Non Residents External Rupees A/C
  3. Non Residents Ordinary A/C

Residents Foreign Currency A/c

  • For Returning Indians
  • Stay  period outside India -1 Year (It can be in part also)
  • Joint (F/S) A/C with resident relative allowed.
  • CA/SB/FD
  • FD period - bank discretion.
  • Rate of Interest an SB/FD - Bank discretion.
  • Outward remittance - allowed 

RFC(D) - Resident Foreign Currency Domestic A/c


  • Resident A/c can open (Any)
  • No interest
  • Amount credited during month will be converted into Indian currency up to last day of next month

EEFC A/c

  • Current account interest free
  • Opened by exporters
  • 100% export earning A/C

Foreign Currency Non Resident (FCNR) A/c

  • NRI & PIO can open 
  • Can be opened any convertible currency
  • FD only (1 to 5 Years)
  • Interest - Ceiling fixed by RBI - LIBOR (London Interbank Rate) +2% for 1 Year to 3 Years
  • Libor + 3% for 3 to 5 Years
  • Loan - Rupee/FC loan to depositor or third party up to full value of FDR
  • Bank has FC risk
  • Repatriable - Full amount can be sent outward
  • Interest not taxable
  • Can be converted into Indian currency 


Non Residents External Rupees (NRE) A/c 

  • SB/CA/FD
  • Rate of interest /period bank discretion 
  • FD (min period -1 yr)
  • FC risk - customer
  • A/C is opened in rupee by converting the FC at currency exchange rate.
  • Interest - non taxable

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