Non-resident Indians (NRIs) typically open bank accounts to deposit their income, originating from India or any other country. They look to invest this money in various investment options in India. Most NRIs face a plethora of avenues when it comes to investing their money in Indian banks.
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Several banks offer myriad options to NRIs for their banking and investment needs in India, ranging from a bank account to investment and foreign exchange services. Amongst the various options, NRE Deposit is amongst the more preferred options.
An NRE Deposit is a term deposit in which the NRI invests in foreign currency, which will be converted into Indian Rupees. Generally, an NRE term deposit is utilized to remit foreign earnings, and the interest earned is free from income tax. NRE stands for Non-Resident External.
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.
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 2 Crore, by various banks in India.
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Name of the Bank | FD Interest rates p.a. for an amount less than Rs 2 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 | 5.50% | 6.00% | 5.75% | 5.75% |
AU Small Finance Bank | 6.35% | 6.35% to 6.50% | 6.25% | 6.50% |
Axis Bank | 5.10% | 5.10% to 5.40% | 5.40% | 5.75% |
Bank of Baroda | 5.05% | 5.05% to 5.15% | 5.35% | 5.35% |
Bank of India | 5.25% | 5.25% to 5.30% | 5.30% | 5.30% |
Bank of Maharashtra | 4.90% | 4.90% | 4.90% | 4.90% |
Bombay Mercantile Co-operative Bank | 4.90% | 4.90% to 5.10% | 5.30% | 5.40% |
Canara Bank | 5.20% | 5.20% to 5.50% | 5.50% | 5.50% |
Central Bank of India | 4.90% | 4.90% to 5.10% | 5.10% | 5.10% |
City Union Bank | 5.50% | 5.50% to 5.75% | 5.50% | 5.25% |
Cosmos Cooperative Bank | 5.30% | 5.50% | 5.50% | 5.80% |
DCB Bank | 5.80% | 5.80% to 6.00% | 6.50% | 6.50% |
Dhanlaxmi Bank | 5.25% | 5.25% to 5.40% | 5.50% | 5.60% |
Equitas Small Finance Bank | 6.50% | 6.50% to 6.65% | 6.40% | 6.65% |
ESAF Small Finance Bank | 6.00% | 6.00% to 6.50% | 5.25% to 5.75% | 5.25% |
Federal Bank | 5.10% | 5.10% to 5.35% | 5.35% | 5.50% |
HDFC Bank | 4.90% | 4.90% to 5.15% | 5.30% | 5.50% |
ICICI Bank | 4.90% | 4.90% to 5.15% | 5.35% | 5.50% |
IDBI Bank | 4.90% | 5.00% to 5.10% | 5.25% | 5.25% |
IDFC First Bank | 5.50% | 5.50% to 5.75% | 6.00% | 5.75% |
Indian Bank | 5.00% | 5.10% | 5.25% | 5.15% |
Indian Overseas Bank | 5.20% | 5.20% to 5.25% | 5.25% | 5.25% |
IndusInd Bank | 6.50% | 6.50% | 6.50% | 6.25% |
J&K Bank | 5.10% | 5.10% to 5.20% | 5.30% | 5.30% |
Karnataka Bank | 5.30% | 5.30% to 5.55% | 5.55% | 5.70% |
Karur Vysya Bank | 5.50% | 5.50% | 5.65% | 5.75% |
Kotak Mahindra Bank | 4.50% | 4.50% to 5.00% | 5.10% to 5.25% | 5.30% |
Punjab and Sind Bank | 5.15% | 5.15% | 5.30% | Nil |
Punjab National Bank | 5.10% | 5.10% | 5.25% | 5.25% |
Saraswat Co-operative Bank | 5.10% | 5.25% | 5.25% | Nil |
SVC Co-operative Bank | 5.30% | 5.30% | 5.60% | Nil |
South Indian Bank | 5.40% | 5.40% | 5.50% to 5.65% | 5.50% |
State Bank of India | 5.00% | 5.00% to 5.10% | 5.30% | 5.40% |
Tamilnad Mercantile Bank | 5.75% | 5.65% to 5.75% | 5.50% | 5.50% |
TJSB Bank | 5.00% | 5.50% | 5.60% | 5.75% |
UCO Bank | 4.90% | 5.00% | 5.05% | 5.05% |
Ujjivan Small Finance Bank | 6.50% | 6.50% to 6.75% | 6.75% | 5.80% |
Union Bank of India | 5.25% | 5.30% to 5.50% | 5.55% | 5.60% |
Yes Bank | 6.00% | 6.00% to 6.25% | 6.50% | 6.75% |
Zoroastrian Co-operative Bank | 5.00% | 5.00% | 4.75% | 4.75% |
Source: Bank websites
While small finance banks offer the highest FD interest rates, several NRI investors would be risk-averse to investing in small finance banks as well as cooperative banks. IndusInd Bank offers the highest FD interest rate @6.50% p.a. for 1 year to 5 years among the private sector banks. Amongst the public sector banks, Union Bank of India offers the highest FD interest rates @5.50% p.a. for 2 years to 3 years, @5.55% p.a. for 3 years to 5 years, and @5.60% p.a. for 5 years to 10 years.
The following table compares the FD interest rates on NRE deposits of amounts more than Rs 2 Crore by some of the banks mentioned above.
Name of the Bank | FD Interest rates p.a. for an amount more than Rs 2 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 | 5.50% | 6.00% | 5.75% | 5.75% |
Axis Bank | 4.15% | 4.15% to 4.35% | 4.35% | 4.35% |
Bank of Baroda | 3.55% | 3.55% to 4.10% | 3.25% | 3.25% |
Bank of India | 3.50% | 3.50% | 3.50% | 3.50% |
Bank of Maharashtra | 4.90% | 4.90% | 4.90% | 4.90% |
Bombay Mercantile Co-operative Bank | 2.90% | 2.90% to 3.00% | 3.00% | 3.00% |
Canara Bank | 3.90% | 3.90% | 3.40% | 3.40% |
Central Bank of India | 3.50% | 3.50% | 3.50% | 3.50% |
City Union Bank | 5.50% | 5.50% to 5.75% | 5.50% | 5.25% |
Cosmos Cooperative Bank | 5.30% | 5.50% | 5.50% | 5.80% |
Federal Bank | 4.25% | 4.25% to 4.75% | 4.75% | 4.75% |
HDFC Bank | 3.75% | 3.75% to 4.25% | 4.25% | 4.25% |
ICICI Bank | 3.75% | 3.75% to 4.40% | 4.40% | 4.40% |
IDBI Bank | 3.50% | 3.50% to 3.75% | 3.75% | 3.75% |
IDFC First Bank | 6.75% | 7.00% | 7.00% | 7.00% |
Indian Bank | 3.55% | 3.25% | 3.25% | 3.25% |
IndusInd Bank | 6.00% | 6.00% to 6.25% | 6.25% | 6.00% |
J&K Bank | 3.85% | 3.85% | 4.10% | - |
Karnataka Bank | 5.30% | 5.30% to 5.55% | 5.55% | 5.70% |
Karur Vysya Bank | 5.50% | 5.50% | 5.65% | 5.75% |
Kotak Mahindra Bank | 4.00% | 4.00% to 4.50% | 4.60% to 4.75% | 5.00% |
Punjab National Bank | 3.50% | 3.50% | 3.50% | 3.50% |
Saraswat Co-operative Bank | 4.25% | 4.70% | 4.70% | - |
SVC Co-operative Bank | 5.30% | 5.30% | 5.60% | Nil |
State Bank of India | 3.00% | 3.00% | 3.00% | 3.00% |
Tamilnad Mercantile Bank | 5.45% | 5.25% to 5.45% | 5.15% | 5.15% |
UCO Bank | 3.50% | 3.25% to 3.50% | 3.25% | 3.25% |
The rates as mentioned above are generally for amounts ranging from Rs 2 Crore to Rs 5 Crore. Some of the banks offer bulk FD interest rates for deposits amount over Rs 5 Crore.
NRIs are generally known to invest in deposits from some popular banks such as SBI, ICICI Bank, and HDFC Bank, although interest rates on offer may not be the highest. E.g. ICICI Bank FD rate ranges between @3.75% p.a. to 5.50% p.a.
*All savings are provided by the insurer as per the IRDAI approved
insurance plan. Standard T&C Apply
+ Trad plans with a premium above 5 lakhs would be taxed as per
applicable tax slabs post 31st march 2023
#Discount offered by insurance company
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