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NRI Fixed Deposit

A Fixed Deposit is an investment product offered by banking institutions in the country. Certain bank FDs are especially for Indian citizens, while there are some FDs that are designed for Non-Resident Indians (NRIs). Fixed Deposits for NRIs can be classified into 4 categories:

NRE Fixed Deposit

This is the most popular type of Fixed Deposits for NRIs. This enable NRIs to deposit a certain part of his/her earnings, as per his/her preference, in the bank account. It serves the objective of ensuring savings by contributing a part of his/her income. The deposited amount earns interest, as offered by the bank, helping the depositor to grow a healthy investment corpus. Deposits toward this type of NRI Fixed Deposit are accepted in Indian currency only. The investment tenure and interest rate varies from that of a domestic FD.

NRO Fixed Deposit

The NRO deposit is similar to NRE deposits in terms of the currency accepted as deposit. For this NRI Fixed Deposit, the interest rates are the same as that of domestic Fixed Deposits. The money deposited in an NRO FD deposit is taxable.

NRO Tax Saver Fixed Deposit

This NRI Fixed Deposit offers almost the same features and benefits of a NRO Fixed Deposit. The only differences are while NRO FD is taxable and offers an investment tenure between 1 year and 10 years, NRO Tax Saver FD is tax free and offers a minimum investment tenure of 5 years.

FCNR Fixed Deposit

A Foreign Currency Non-Repatriable (FCNR) Fixed Deposit enables investors to deposit their capital, according to their choice, in foreign currencies that are accepted all over the world. Most leading banks accept United States Dollar, Great Britain Pound, Euro, Japanese Yen, Canadian Dollar and Singapore Dollar.

RFC Deposit

This type of NRI Fixed Deposit is especially tailor-made for NRIs who plan to return to India in the near future. The accepted currencies usually are United States Dollar, Euro and Great Britain Pound. The interest earned in this Fixed Deposit for NRI is fully repatriable.

Benefits of NRI Fixed Deposit

  • Safe investment for NRIs
  • Offers comparatively higher interest rates than some other investments
  • Ensures capital growth at a pre-determined interest rate, making it a zero risk investment
  • Financial security for meeting long and short term financial goals
  • A smart investment to save money earned overseas
  • Avail tax exemptions on two types of FDs for NRIs
  • Loan facilities on certain FDs for NRIs offer liquidity
  • Flexibility for nomination

Types of NRI Fixed Deposits

Type / criteriaNRO FDFCNRNRO Tax SaverNRE FDRFC
CurrencyIndian rupeeUSD, GBP, JPY, Euro, CAD, SGP, AUDIndian RupeeIndian RupeeUSD, JPY, Euro, GBP
RepatriabilityNot fully repatriableFully repatriable (Interest and principal)Not fully repatriableNot fully repatriableRepatriable on bonafide reasons
EligibilityPerson of Indian Origin/ Individual NRIPerson of Indian Origin/ Individual NRIPerson of Indian Origin/ Individual NRIPerson of Indian Origin/ Individual NRIPerson of Indian Origin/ Individual NRI
Joint Account FacilityAvailableAvailableAvailableAvailableAvailable
TaxInterest might be subjected to taxNo taxInterest might be subjected to taxNo taxExempted tax can be claimed
Tenure1 year to 10 years1 year to 5 yearsMinimum of 5 years1 year to 10 years1 year to 10 years

Interest Rates offered by Various Banks on NRI Fixed Deposits

The rate of interest differs between various Fixed Deposits for NRIs because it is determined by factors like the invested amount and tenure. The interest rate offered by banks on their Fixed Deposits for NRIs is also decided by various other internal and external parameters. Also, the currency affects the interest rate that the NRI depositor will be offered.

Eligibility Criteria for NRI Fixed Deposit

  • Passport: The depositor’s Passport reflects his/her name, date of birth, address, photograph and signature.
  • Visa or Work permit: It is mandatory for NRIs to submit Visa documents that include the work permit, resident permit, permanent resident visa and employment visa, along with the other requested documents.

FAQs on NRI Fixed Deposit

Can an NRI have a joint savings account in India?

Yes, an NRI can hold more than one joint savings account, but only with close relatives.

Can NRI have a savings account in India?

Yes a NRI can hold a savings account in India.

Can NRI invest in FD?

Yes,a NRI can invest in Fixed Deposit in India. There are 5 types of FDs for NRIs to cater to varied requirements.

Can NRI open a bank account in India?

Yes a NRI can open a bank account in India.

Can US based NRI invest in India?

Yes, US based NRIs can invest in schemes that are open to invest from them.

Is the interest on FDs taxable for NRIs?

The interest income earned from Fixed Deposits for NRIs is taxable.

Is NRE FD tax free?

Yes NRE Fixed Deposit for NRIs is tax free.

What is NRE Fixed Deposit?

NRE Fixed Deposit is one of the most popular NRI Fixed Deposits. This enable NRIs to invest a certain percentage of his/her earnings, as per his/her choice, in his/her preferred bank. It is a source of savings by contributing a part of his/her income that earns a pre-decided interest rate. Deposits towards NRE Fixed Deposit for NRIs can be made with Indian currency only. The investment tenure and interest rate varies from that of a domestic FD. They offer entire repatriability and is tax free.

What is the difference between NRE and NRO account?

  • NRE Fixed Deposit: This is the most popular type of Fixed Deposits for NRIs. This enable NRIs to deposit a certain part of his/her earnings, as per his/her preference, in the bank account. It serves the objective of ensuring savings by contributing a part of his/her income. The deposited amount earns interest, as offered by the bank, helping the depositor to grow a healthy investment corpus. Deposit towards this type of NRI Fixed Deposit are accepted in Indian currency only. The investment tenure and interest rate varies from that of a domestic FD. They offer entire repatriability and is tax free.
  • NRO Fixed Deposit: The NRO deposit is similar to NRE deposits in terms of the currency accepted as deposit. For this Fixed Deposit for NRIs, the interest rates are the same as that of domestic Fixed Deposits. The amount deposited in an NRO FD is taxable.

What is the interest rate for NRI account in India?

The interest rate for NRI accounts differ on the basis of the deposit or investment scheme that they have opted for.

Which bank gives highest interest for NRI?

The interest rate on NRI FD schemes differs between different bank deposits on the basis of the tenure and invested amount.

Which bank is best for FD for 1 year?

Axis Bank offers the highest interest rate of 6.75% for an investment tenure of 6 months to 8 months 29 days on their Fixed Deposits.

Which bank is best for NRI account?

Here are some of the leading options for NRI Fixed Deposits that you can consider:

  • Axis Bank NRE Fixed Deposit for NRIs
  • RBL NRI FDs
  • Deutsche Bank Value Plus Savings
  • Bank of Baroda NRE Savings account
  • Kotak Mahindra Bank
  • ICICI Bank NRE Account
  • SBI NRE Accounts
  • HDFC NRE Accounts
  • CitiBank NRE Accounts