Best Fixed Deposit Rates for NRE in 2020

NRE or Non-Resident External accounts can be of Recurring, Savings, or Fixed Deposit type wherein NRIs can easily deposit their foreign currency that is remitted to an Indian bank account. In India, an NRE account is held in Indian Rupees and is completely free of tax. Here we are going to discuss how you will be able to select a suitable NRE FD and are mentioning best fixed deposit interest rates offered by various Indian banks.

NRIs are not eligible to open a normal account which is designed for an Indian Resident according to the guidelines of the Foreign Exchange Management Act (FEMA) and if one breaches this, he/she attracts a huge penalty. In addition to this, no interest is earned when the account is closed within one year.

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Advantages of an NRE FD Account

  • Both principal amount and interest earned are free of tax in India.
  • Higher interest rates are provided as compared to savings accounts.
  • The interest earned and principal amount both are freely repatriable to the country of residence of the account holder.
  • Can jointly be opened with other NRIs.
  • NRE FD is easily covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC) insurance (a compensation of up to Rs.5 lakh is given to the depositor, if the bank defaults).
  • The tenure of fixed deposits is flexible and can range from one year to 10 years.

What an NRI Gets in NRE Fixed Deposit

There are many features that an NRI gets in NRE Fixed Deposits:

  • One can deposit money in Indian rupees
  • These plans offer flexible tenure which may range from one year to ten years
  • An NRE FD account can easily be closed any time after opening
  • The facility of auto-renewal is provided by banks at the time of renewal at the time of maturity
  • Some banks offer up to 90% overdraft over the NRE FDs
  • Some banks offer the facility of loans against NRE FD
  • Some banks also allow joint NRE fixed deposit accounts
  • The banks have stipulations regarding the minimum and maximum amounts that a person deposit
  • The banks can as well provide tax-saver fixed deposit accounts to Non-resident Indians that allows them to claim tax benefits u/s 80C of the Income-tax Act
You May like to Read: Features of Post Office Fixed Deposit Scheme

Best NRE Fixed Deposit Interest Rates

The below-mentioned table provides a list of fixed deposit interest rates for NRE accounts that are offered by different banks:

Bank’s Name

FD Interest Rate / Tenure

1 Year

2 Years

3 Years

5 Years

SBI

5.10%

5.10%

5.30%

5.40%

HDFC Bank

5.10%

5.10%

5.20%

5.35%

Yes Bank

6.75%

7.00%

6.75%

6.75%

ICICI Bank

5.15%

5.35%

5.35%

5.50%

AXIS Bank

5.45%

5.50%

5.50%

5.50%

PNB

5.25%

5.25%

5.25%

5.30%

CANARA Bank

5.50%

5.50%

5.50%

5.50%

Bank of Baroda

5.10%

5.10%

5.10%

5.30%

Kotak Mahindra Bank

4.75%

4.90%

4.90%

4.50%

Bank of India

5.50%

5.40%

5.40%

5.40%

IDBI Bank

5.35%

5.45%

5.40%

5.50%

Federal Bank

5.45%

5.45%

5.60%

5.60%

Union Bank of India

5.40%

5.40%

5.40%

5.45%

IndusInd Bank

7.00%

7.00%

6.75%

6.75%

Indian Bank

5.50%

5.40%

5.40%

5.40%

Central Bank of India

5.10%

5.10%

5.15%

5.15%

CITI Bank

3.00%

3.25%

3.80%

3.90%

Indian Overseas Bank

5.40%

5.45%

5.45%

5.45%

DBS Bank

4.75%

5.00%

5.00%

5.25%

Oriental Bank of Commerce

5.25%

5.25%

5.25%

5.30%

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

Note: The above mentioned NRE interest rates are updated in July 2020

United Bank of India and Oriental Bank of Commerce are merged in PNB effectively from April 1st, 2020. Therefore, the updated rates will mirror NRE FD Rates for PNB.

You May like to Read: Difference between FD and PPF

Small Finance Bank Fixed Deposit Interest Rates for NRE Accounts

The Indian government has given license to some companies for operating as financial institutions such as small finance banks. Even though it is not a scheduled commercial bank, these institutions are niche in operations. FD is one of the services that is offered by these Small Finance Banks. Mentioned-below is the list of some of the small finance banks which offer the best Fixed Deposit interest rate for NRE accounts:

Small Finance Bank

FD Interest Rate / Tenure

One Year

Two Years

Three Years

Five Years

ESAF Small Finance Bank

7.50%

7.25%

7.00%

6.50%

AU Small Finance Bank

6.00%

7.00%

7.25%

7.00%

Equitas Small Finance Bank limited

7.10%

7.10%

7.15%

6.75%

Ujjivan Small Finance Bank

6.95%

6.95%

6.50%

6.25%

Disclaimer: Policybazaar does not endorse, rate, or recommend any particular insurer or insurance product offered by an insurer.

Note: This table was last updated on July’ 2020

Eligibility to Get NRE Fixed Deposits

One should fulfill the below criteria for opening an NRE Fixed Deposit account:

  • An individual should be a Person of Indian Origin or Non-Resident Indian (NRE).
  • The person should have an NRE account. 3

Documents Needed to Open an NRE FD Account

For opening an NRE fixed deposit account, one has to submit the following documents:

  • A valid ID proof
  • Passport
  • Valid work visa

Benefits of NRE FDs

An NRI who opens an NRE FD account is liable for availing the following benefits:

  • An NRI is eligible to open a Fixed Deposit account in India and can earn good interest.
  • These deposits work as a ready fund when one faces some unforeseen situation because NRE Fixed Deposits can be closed prematurity.
  • The banks provide the facility of overdraft and loan against FD so that a depositor can have money as when needed.
  • The facility of the nominee is provided in NRE Fixed Deposits.
You May like to Read: SBI Fixed Deposit Vs Post Office Term Deposit Schemes

The Final Words!

It is really difficult to select the best when we have a list of best things and so does happens with the Fixed Deposit interest rates provided for an NRE account. However, there are some factors that one may consider while selecting a bank for opening an NRE Fixed Deposit account. These are the good interest rate and a long term and trustworthy relationship with that bank. One must as well check whether the account one is opening is operable from his/her country of residence. Some banks have their branches in countries like the UK, the USA, Middle East, etc.

You May like to Read: SBI FD Interest
Written By: PolicyBazaar - Updated: 16 October 2020
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