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NRE Fixed Deposit Rates

A NRE or a Non-Resident External Account can be defined as an account that can be a Recurring, Savings or a Fixed Deposit Account where a Non Resident of India (NRI) is allowed to deposit his/her foreign currencies. This deposit gets remitted to an Indian domestic account. The major benefit of an NRE account is that it is held in Indian Rupees and is completely tax-free under the Indian Law. Also, as an NRI, an individual earns a considerable amount of interest in Indian Rupees on this deposit.

Benefits of NRE FD Account

As an NRE account holder, you are entitled to multiple benefits. Some of them are listed below-

  • In this account, both the principal and the interest earned are tax-free in India.
  • In the account holder’s country of residence, the principal and interest earned are freely repatriable.
  • An NRE account offers high-interest rate, making it a lucrative option for NRIs.
  • This account can either be opened individually or jointly with other Non-Resident Indian(s).
  • Also, the tenures of an NRE account are flexible as they range from 1 year to 10 years.

NRE FD Rates Offered by Banks

Note: The below mentioned rates are subject to change anytime, without any prior notice, as per the bank’s discretion.

Bank 1 year to < 2 years 2 years to < 3 years 3 years to < 5 years 5 years to < 10 years
SBI 6.70% 6.75% 6.80% 6.85%
HDFC 7.25% 7.10% 7.10% 6.00%
ICICI 6.75% 7.00% 7.00% 7.00%
PNB 6.75% 6.75% 6.25% 6.25%
AXIS 7.25% 7.25% 7.25% 7.00%
CANARA 7.00% 6.70% 6.20% 6.20%
KOTAK MAHINDRA 7.50% 7.25% 7.10% 6.50%
BANK OF BARODA 6.70% 6.60% 6.70% 6.60%
UNION BANK 6.70% 6.70% 6.85% 6.85%
IDBI BANK 6.85% 6.75% 6.75% 6.25
BANK OF INDIA 6.65% 6.70 6.50% 6.35%**
FEDERAL BANK 7.30%*** 7.00% 7.00% 7.00%
INDUSIND BANK 7.75%**** 7.50% 7.50% 7.50%
YES BANK 7.10% 7.10% 7.10% 7.10%
CENTRAL BANK OF INDIA 6.60% 6.50% 6.50% 6.50%
INDIAN BANK 6.60% 6.50% 6.00% 6.00%
VIJAYA BANK 6.80% 6.80% 6.80% 6.80%
CITIBANK 7.25***** 6.00% 6.00% 6.00%
INDIAN OVERSEAS BANK 6.60% 6.75% 6.80% 6.80%
PUNJAB AND SIND BANK 6.75% 6.60% 6.55% 6.55%
UCO BANK 6.75% 6.75% 6.75% 6.75%
UNITED BANK 6.00% 6.00% 6.00% 6.00%
ORIENTAL BANK OF COMMERCE 6.75% 6.75% 6.70% 6.75%
DBS BANK 6.75% 6.75% 6.75% 6.75%

Note: *7% from 4th year to less than 5 years

**Up to 8 years 6.50% and 6.35% beyond that

***7.30% from 1 year to 15 months and 7.00% beyond that

**For between 12 months and 14 months it is 8.00%

*From 365 to 400 days- 6.35%; 401-540 days- 7.25%; 541-731 days- 6.00%

What is Difference Between NRE and NRO FDs

NRE and NRO accounts have some stark differences between each other. NRE Fixed Deposit is a term deposit account where a Non Resident Indian (NRI) makes deposits from abroad and remits the same in an Indian account. Here, the currency is converted into rupees. An NRE deposit is similar to a term deposit account held to transfer foreign earnings.

On the other hand, an NRO account is opened by an NRI so as to manage the income that he has earned in India. This income could either be rent, pension or any other types of dividends earned in India. The interest earned from these deposits are fully taxable. Here is a table that talks about the differences between NRE and NRO Fixed Deposits

Differentiating factor NRO NRE
Taxability Non Taxable Non Taxable
Repatriability Restricted Repatriability Completely Repatriable
Ownership Can be jointly opened with a resident of India Cannot be opened jointly with a resident of India
Deposits Can deposit income earned in India Cannot deposit income earned in India

FAQs on NRE Fixed Deposit

Can I keep my NRE account after returning to India?

Once you return to India, you are not allowed to hold an NRE account. The money in NRE must be transferred to Resident Foreign Currency Account (RFC) or to Resident savings account.

Can I transfer money from NRE account to another bank account?

Yes, there are no restrictions to transfer money from your NRE account back to your foreign account. This lets you to transfer funds from an existing NRE Savings Accounts to open NRO/FCNR accounts.

Can NRI invest in fixed deposits in India?

No, as an NRI, you can invest in either a non-resident ordinary (NRO) fixed deposit or in a non-resident external (NRE) fixed deposit.

Do I have to pay tax on NRE fixed deposit?

As a non-resident of India, your NRE fixed deposits are non-taxable for both the principal and the interest earned from the deposits.

How can I deposit in NRE account?

You have to deposit money in your NRO account, where the foreign currency is automatically converted to Indian Rupees. You can apply for an NRO account jointly with an Indian resident. In this case, the bank shall provide you with an NRO debit card each. It is then possible to transfer this money to and from your current NRE account.

How much TDS do I have to deduct on property purchased from an NRI?

The TDS you pay is applicable according to residency status of a seller, as you are making the payment to an NRI seller. In this case, the rate of TDS will vary between 20.60% and 20.66%, as the case may be. To make this process simpler, for a property owned by an NRI, a buyer must deduct TDS of 20.60% on total consideration value.

Is interest on NRE account taxable in India?

No, interest on NRE Deposits is considered tax-free.