Union Bank of India NRE FD Rates

Union Bank of India is one of India’s leading public sector banks operating from their Mumbai headquarters since 1919. It is the first sizable Indian bank to fully integrate Core Banking Solutions into its system to offer its vast clientele a digital platform covering all operations.

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Two other significant banks -   Andhra Bank and Corporation Bank merged with Union Bank on 1 April 2020 to complement 9500+ domestic branches catering to approximately 120 million customers. The bank is well represented overseas with branches, representative offices, subsidiaries, and joint ventures. The bank’s business mix stands at Rs15.34 Lakh crore as of April 1, 2020. 

Union Bank of India Fixed Deposits

NRI Banking is a key focus area of Union Bank of India, providing fund security and assured interest rates in possibly the most comprehensive product range for the International Indian. As the name suggests, Fixed Deposits park NRI Funds for definite periods to earn attractive interest rates based on tenure. 

The choice extends to investment in Indian Rupees (INR) or designated currencies, which can grow and repatriate freely wherever the NRI desires. The bank has specialized branches to deliver customized services to the NRI, regardless of the resident country. 

Let us check out the NRI Fixed Deposit Bouquet tailored for the NRI’s needs to earn Union Bank of India NRE Fixed Deposit Rates. 

Types of Union Bank of India Fixed Deposits

Fixed Deposits are traditionally referred to as FD in banking jargon and Union Bank is no exception. Before venturing into various types of NRI FD on offer, a few basic concepts need to be clarified. 

Rupee FDs are broadly classified as NRE and NRO. The former NRE stands for Non-Resident External, meaning it parks overseas earnings converted into INR. On the other hand, NRO is a Non-Resident Ordinary that parks income from assets and investments in India. The latter is subject to Indian Income Tax laws, while the former is not. FCNR (B) and RFC FDs are foreign currency accounts. FCNR stands for Foreign Currency Non-Resident and RFC for Returning Foreign Currency.

Eligibility

NRIs, PIO, and OIC are eligible to open NRE, NRO Rupee Term Deposit, and FCNR (B). RFC is an account specially meant for the Returning Indian who is an NRI returned to stay in the country permanently for a prolonged period. Residents of Nepal and Bhutan are not eligible to open NRI Fixed Deposits, while Pakistan residents can open after obtaining the requisite permission from RBI.   

NRE Fixed Deposit

  • Account Operation: The account is opened singly or jointly with suitable repayment instructions. 
  • Minimum Investment:  Rs.10000 for Urban Centres and Rs.5000 for Semi-Urban and Rural Centres. 
  • Tenor: The minimum period for earning interest is one year, and the maximum is limited to 10 years. 
  • Interest Payment: Union Bank of India NRE FD Rates are applied and compounded quarterly. Though the accrued interest is credited to the account half-yearly, it becomes payable to the NRI only upon maturity.  
  • Variants: The NRE FDs have several variants to help the NRI to maximize yields primarily. 
    • Union Smart Rupee Deposit Scheme: The Rupee Balance in the NRE Account is converted into foreign currency for a minimum of US$ 10000 or equivalent. The amount is lodged in an FCNR (B) account for one year to earn interest at the FCNR (B) Deposit rate. 
    • NRE Flexi Fixed Deposit: It is a combination of Savings and Fixed Deposits. Balance over Rs.50000 in the savings account is swept out to Fixed Deposit in multiples of Rs.10000 for one year. The interest payable is at Union Bank of India NRE FD Rates, yielding higher returns.
    • NRE monthly Income Scheme:  All other NRE FD parameters remain the same; interest is paid at a discounted value of the contracted rate. 
  • Repatriation: The principal and the earned interest is fully and freely repatriable.
  • Taxation:  The principal and earned interest is tax-free as per Indian Income Tax laws. 

NRO Fixed Deposit 

  • Account Operation: The account is opened singly or jointly with suitable repayment instructions. 
  • Minimum Investment:  Rs.10000 for Urban Centres and Rs.5000 for Semi-Urban and Rural Centres. 
  • Tenor: The minimum period for earning interest is six months, and the maximum is limited to 10 years. 
  • Interest Payment: Union Bank of India NRE FD Rates are applied and paid in the same principles applied to NRE FD. 
  • Variants: The NRO FDs have several variants to help the NRI to maximize the yields primarily. 
    • NRO Short Deposit Scheme: The tenor of this scheme is seven days to less than one hundred and eighty days.  The minimum investment up to fourteen days is Rs.5 Lac. 
    • NRO Flexi Fixed Deposit: It is a combination of Savings and Fixed Deposits. Balance over Rs 50,000 in the savings account is swept out to Fixed Deposit in multiples of Rs 10,000. The account tenor is forty-six days to one year. The interest payable is at Union Bank of India NRE FD Rates, yielding higher returns.
    • NRO Monthly Income Scheme:  All other NRE FD parameters remain the same and interest is paid at a discounted value of the contracted rate. 
  • Repatriation: The earned interest is repatriable after paying applicable taxes.  
  • Taxation:  The earned interest is taxable as per Indian Income Tax laws. 

FCNR (B) FD

  • Currency: Union Bank FCNR (B) FD is held in six designated foreign currencies. The NRI is insulated from exchange rate fluctuations.  
    • United States Dollar ($)
    • GB Pound Sterling (£)
    • Euro (€)
    • Japanese Yen (¥)
    • Canadian Dollar ($)
    • Australian Dollar ($)
  • Account Operation: The account is opened singly or jointly with NRI, seeding suitable repayment instructions. The operation is “Former or Survivor” if the joint account holder is a resident relative. 
  • Tenor: The minimum period for earning interest is one year, and the maximum is limited to five years. 
  • Interest Payment: Union Bank of India NRE FD Rates are linked to London Interbank Offered Rate (LIBOR), and the interest on FCNR Deposit is based on currency.  
  • Variant: The account is styled as Union Smart Foreign Currency to earn interest higher than FCNR (B). A minimum amount of US$ 10000 or equivalent is placed in NRE FD for one year to earn Union Bank of India NRE FD Rates. 
  • Repatriation: The principal and the earned interest is fully and freely repatriable.
  • Taxation:  The principal and earned interest is tax-free as per Indian Income Tax laws. 

RFC FD

  • Designated Currency:
    • United States Dollar ($)
    • GB Pound Sterling (£)
    • Euro (€)
  • Account Operation: The account is opened singly or jointly with suitable repayment instructions. 
  • Tenor: The minimum period for earning interest is one year, and the maximum is limited to three years. 
  • Interest Payment: Union Bank of India NRE FD Rates are linked to London Interbank Offered Rate (LIBOR), and the interest on FCNR Deposit is based on currency.  
  • Variant: The account is styled as Union Smart Foreign Currency to earn interest higher than FCNR (B). A minimum amount of US$ 10000 or equivalent is placed in NRE FD for one year to earn Union Bank of India NRE FD Rates. 
  • Repatriation: The principal and the earned interest are repatriable if the investor retains NRI status. 
  • Taxation:  The earned interest is taxable as per Indian Income Tax laws. 

Union Bank of India NRE Fixed Deposit Rates

The applicable interest rates are described in the following grids. It is essential to understand that the Union Bank of India NRE FD Rates are subject to revision from time to time. 

GRID I

Union Bank Interest Rates for Rupee NRE and NRO Fixed Deposit 

Sl No

Maturity Bucket 

Effective From 15/12/2020

ROI in % pa

1

7 days - 14 days

3.00

2

15 days - 30 days 

3.00

3

31 days - 45 days 

3.00

4

46 days - 90 days 

3.75

5

91 days - 120 days 

4.25

6

121 days - 180 days 

4.30

7

181 days < 1 year 

4.50

8

1 year  

5.25

9

1+ year  < 2 years

5.30

10

2+ years < 3 years

5.50

11

3 years < 5 years

5.55

12

5 years  to 10 years

5.60

ROI = Rate of Interest, PA = Per Annum, Rates are applied to Deposits less than Rs 2 Cr.

GRID-II

Union Bank FCNR and RFC  FD Rates effective from 01/06/2021

Sl No

Maturity Bucket 

Currency

US-$ -1

US-$-2

GB-£

EU-€

JP-¥

CA-$ 

AU-$

1

1 year < 2  years

0.81

0.81

0.56

0.01

0.01

0.59

0.18

2

2+ years < 3 years

0.74

0.84

0.74

0.01

0.07

0.75

0.27

3

3+ years < 4 years

1.00

1.10

0.86

0.01

0.09

1.03

0.48

4

4+ years < 5 years

1.17

1.27

1.01

0.01

0.10

1.27

0.72

5

5 years only 

1.33

1.43

1.10

0.08

0.11

1.50

0.94

The rate of interest is expressed in percentage per annum.

US$ - 1: For Deposits less than 300,000.

US$ - 1: For Deposits equal to or greater than 300,000

Conclusion

Union Bank of India has many features available to Resident Indian customers to the International Indians to offer varied choices to invest in NRI fixed Deposits and their several variants. The primary aim of Union Bank is to maximize the returns on NRI investments. Competitive Union Bank of India NRE Fixed Deposit Rates coupled with innovative flexibilities are ideal for safe and secure NRI investments.  

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

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C apply.

“Tax benefit is subject to changes in tax laws. Standard T&C apply.”

Written By: PolicyBazaar - Updated: 27 July 2021
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Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
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