What is the NRE Fixed Deposit?
The Non-Resident External FD is a highly preferred term deposit specifically designed for Non-Resident Indians to manage their foreign earnings in India. The investment is typically made using foreign currency remitted into India, which is then converted into Indian Rupees upon deposit.
NRIs primarily utilize this type of deposit to invest income earned outside of India, and its most significant feature is that the interest earned on an NRE Deposit is completely exempt from Indian income tax. Both the principal amount and the interest are fully and freely repatriable outside of India, making it a secure and tax-efficient solution among the various banking and investment options available to NRIs.
Who can invest in NRE Deposits?
An NRI or Overseas Citizen of India or a Person of Indian Origin and their spouses can open an NRE deposit. The depositor shall have opened NRE account(s) with a bank or FI, which is authorized by the Reserve Bank of India, to provide various banking services to NRIs.
Characteristics of NRE Deposits
- NRIs, who earn income in foreign currency outside India and wish to get it converted to Indian Rupee, make use of the NRE deposit.
- Both the principal amount and the interest can be repatriated entirely.
- NRE deposit is denominated in Indian Rupees.
- It can be held jointly with other NRIs.
- Auto-renewal facilities are available.
- Flexible tenures generally ranging from 1 year to 10 years are available.
- Some banks offer loans, including overdrafts, against NRE deposits.
- Some banks provide a 'sweep-in sweep out ' facility between an NRE bank account and NRE deposits.
- The deposits provide a nomination facility.
- Full or partial withdrawal of the NRE deposit is allowed.
- Premature closing of the deposit is allowed at any given point in time.
- The NRE deposit is insured up to a prescribed limit by the Deposit Insurance and Credit Guarantee Corporation.
NRE Deposit Interest Rates Comparison
The foremost differentiating factor in choosing a bank for opening an NRE deposit is the FD interest rate¸ along with the tenure. The following table provides a detailed list of the FD interest rates on NRE, their deposits of an amount less than Rs 3 Crore, by various banks in India.
| Name of the Bank |
FD Interest rates p.a. for an amount less than Rs 3 Crore |
| 1 year |
More than 1 year < 3 years |
More than 3 years < 5 years |
More than 5 years < 10 years |
| Abhyudaya Co-operative Bank |
6.15% |
6.55% |
6.15% |
5.90% |
| AU Small Finance Bank |
6.90% |
7.10% |
7.00% |
6.75% |
| Axis Bank |
6.25% |
6.45% |
6.45% |
6.45% |
| Bank of Baroda |
6.25% |
6.00% |
5.00% |
4.50% |
| Bank of India |
6.25% |
6.30% |
6.25% |
6.00% |
| Bank of Maharashtra |
6.20% |
6.15% |
5.25% |
5.00% |
| Bombay Mercantile Co-operative Bank |
6.15% / 6.40% |
6.35% / 6.60% |
6.20% |
6.00% |
| Canara Bank |
NA |
5.90% |
5.90% |
5.90% |
| Central Bank of India |
6.85% |
7.25% |
7.00% |
6.75% |
| City Union Bank |
6.50% |
6.75% |
6.50% |
6.25% |
| Cosmos Cooperative Bank |
6.30% |
6.85% |
6.65% |
6.75% |
| DCB Bank |
7.00% |
6.70% |
6.50% |
6.50% |
| Dhanlaxmi Bank |
6.25% |
6.95% |
6.50% |
6.60% |
| Equitas Small Finance Bank |
6.35% |
7.00% |
7.00% |
7.00% |
| ESAF Small Finance Bank |
4.75% |
7.60% |
6.00% |
5.75% |
| Federal Bank |
6.25% |
6.60% |
6.75% |
6.50% |
| HDFC Bank |
5.75% |
6.45% |
6.40% |
6.15% |
| ICICI Bank |
6.25% |
6.45% |
6.50% |
6.50% |
| IDBI Bank |
6.20% |
6.55% |
6.35% |
5.90% |
| IDFC First Bank |
6.30% |
6.50% |
7.00% |
6.00% |
| Indian Overseas Bank |
6.50% |
6.40% |
6.10% |
6.10% |
| IndusInd Bank |
6.25% |
6.90% |
6.50% |
6.65% |
| Karnataka Bank |
6.75% |
6.90% |
6.65% |
6.40% |
| Karur Vysya Bank |
6.55% |
6.80% |
6.55% |
6.25% |
| Kotak Mahindra Bank |
6.00% |
6.70% |
6.40% |
6.25% |
| Punjab National Bank |
6.25% |
6.50% |
6.25% |
6.00% |
| Saraswat Co-operative Bank |
6.40% |
6.40% |
6.30% |
6.30% |
| South Indian Bank |
6.60% |
6.20 |
6.00% |
5.70% |
| State Bank of India |
6.25% |
6.40% |
6.30% |
6.05% |
| Tamilnad Mercantile Bank |
6.80% |
6.90% |
6.60% |
6.60% |
| UCO Bank |
6.10% |
6.45% |
6.00% |
6.00% |
| Ujjivan Small Finance Bank |
7.25% |
7.25% |
7.20% |
6.50% |
| Union Bank of India |
6.25% |
6.30% |
6.00% |
5.90% |
| Yes Bank |
6.65% |
7.00% |
6.75% |
6.75% |
While Small Finance Banks (SFBs) like Ujjivan SFB (up to 7.25%) and ESAF SFB (up to 7.60%) offer the highest FD rates, risk-averse investors often favor larger banks. Among major private banks, Yes Bank and ICICI Bank are competitive, offering up to 7.00% and 6.50%, respectively, for certain terms. In the public sector, State Bank of India (SBI) and Punjab National Bank (PNB) offer stable rates, peaking at around 6.40% and 6.50% for the 1-3 year bracket. The choice balances high returns from SFBs against the greater stability offered by the leading private and public sector institutions.
Invest 18k/month & get 2 Crore# Tax-Free*
Manage your funds online60k + happy customers across 25+ countries
Compare & Choose30+ Plans and 150+ Fund options
