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NRO Fixed Deposit Rates

When you have a bank account, you are well-versed with the concept of savings, deposits, and transactions. The most common type of a deposit is an FD (Fixed Deposit). There are many reasons for the popularity of Fixed Deposits. To name a few:

  1. An FD comes with guaranteed returns.
  2. An FD is relatively safe and risk averse.
  3. You can open an FD account for a tenure ranging from 7 days to 10 years.
  4. You can open an FD account with an amount as minimum as Rs. 500.
  5. The rate of interest is pre-defined.
  6. The returns are compounded annually/quarterly.
  7. A 5 years FD account comes with tax benefits.
  8. An FD is offered by all banks and can be opened online via net banking/mobile application.

What is an NRO account?

NRO stands for Non-Resident Ordinary Rupee Account. It is an account dedicated for Non-Resident Indians to help them manage their income earned in India. The interest earned is subject to income tax. When you deposit the money to your NRO account, the foreign currency is automatically converted to INR. Also, the NRO account can be in the form of a Savings BA, Current Account or an FD NRO Account.

Features of NRO Fixed Deposit

The features of this account are:

  1. The interest earned is taxable as per the Income Tax Act, 1961. The interest is also subject to wealth and gift tax.
  2. This account is specifically for NRIs who receives income from various sources in India.
  3. The interest earned can be transferred to a foreign bank account.
  4. You cannot repatriate the principal investment.
  5. You are required to open this deposit on a joint account basis. The significant other person has to be a close relative (resident Indian citizens).

Benefits of NRO Fixed Deposit

The benefits of this account are:

  1. The minimum amount of deposit is Rs. 1 lakh for an NRO account.
  2. An NRO account is maintained in Indian currency.
  3. The deposit amount cannot be repatriated or converted to a foreign currency.
  4. The interest rates are held in Indian currency.
  5. Under this account, NRIs earn a higher interest amount and returns on rupee income in comparison to regular savings account.

NRO FD Rates Offered by Banks

Note: The rates offered vary from one bank to another and are subject to change as per the respective bank’s discretion.

BankNRO Interest Rates
Allahabad Bank4.50% to 7.25%
Axis Bank3.50% to 7.25%
Bank of Baroda4.50% to 7.30%
Bank of India4%
Bank of Maharashtra4.50% to 7.25%
Bharatiya Mahila Bank5.00% to 7.25%
Canara Bank5.25% to 7.25%
CitiBank3.00% to 6.50%
DBS Bank5% to 7.2%
Dena Bank4.5% to 7.25%
Deutsche Bank6.00% to 8.50%
Dhanalakshmi Bank5.00% to 7.10%
HDFC Bank3.50% to 7.25%
ICICI Bank6.00% to 7.35%
IDBI Bank4%
Indian Bank4%
Indian Overseas Bank4%
IndusInd Bank4.00% to 7.25%
Jammu and Kashmir Bank5.00% to 7.35%
Karnataka Bank4%
Kotak Mahindra Bank4.00% to 7.25%
Lakshmi Vilas Bank5.00% to 7.80%
Oriental Bank of Commerce4.00% to 7.25%
Punjab and Sind Bank3.75% to 7.00%
Punjab National Bank4.25% to 7.00%
Saraswat Bank4.00% to 7.65%
South Indian Bank4.00% to 7.30%
State Bank of Bikaner and Jaipur5.50% to 7.00%
State Bank of Hyderabad6.00% to 7.50%
State Bank of India5.50% to 7.00%
State Bank of Mysore5.75% to 7.50%
State Bank of Travancore5.25% to 7.00%
Syndicate Bank5.50% to 6.75%
Tamilnad Mercantile Bank5.80% to 7.70%
Union Bank of India5.25% to 7.25%
Vijaya Bank4.00% to 7.00%

Taxation on NRO Fixed Deposit

Yes, an NRO Account is subject to Income Tax as per the Income Tax Act, 1961. Note: The principal amount is not subject to income tax, only the interest earned. The income tax applicable on NRO account stands at 30% along with applicable surcharge and cess. If the interest earned is more than Rs. 1 million, an additional surcharge of 10% is applicable.

FAQs on NRO Fixed Deposit

Can I transfer money to an NRO account?

Yes, you can transfer money to your NRO account, provided the income has been earned from sources in India.

Can NRO deposits be repatriated?

No, an NRO deposit cannot be repatriated.

Can we deposit Indian Rupees into an NRO account?

Yes, you can deposit Indian Rupees into an NRO account.

Is it mandatory to convert into an NRO account?

Yes, if you (NRI) want to store income from sources in India, you will need an NRO account.

What is the difference between NRI and NRO account?

An NRI is a Non-Resident Indian, a physical human being, while an NRO is a type of bank account offered to NRIs to help them manage their income earned in India.

What is the TDS rates on NRO interest?

The TDS on interest earned from NRO account @30% plus applicable cess and surcharge. The TDS rate is 31.2% on interest upto Rs. 5 million.