Top NRE Fixed Deposit Plans 2025
A common question that is constantly heard on the lips of every NRI is how can they invest in Fixed Deposits (FDs) in India. It is not a surprise to hear that question as a Fixed Deposit has been for long the favorite choice of investment in the country.
With many people from the country now working and residing outside the country, Non-Resident External (NRE) deposits have become quite popular.
But what are NRE fixed deposits. NRE fixed deposits are similar to regular term deposits with NRIs using NRE accounts to open fixed deposits. The accounts can be opened by all NRIs and are virtually tax-free.
NRE Fixed Deposit Interest Rates
The Interest rates offered on NRE fixed deposit by banks for deposits less than Rs.3 crore are as follows:
Bank | 1 year | More than 1 year to 3 years | More than 3 years to 5 years | More than 5 years to 10 years |
Union Bank of India | 6.80% p.a. | 6.40% p.a. - 7.30% p.a. | 6.50% p.a. | 6.50% p.a. |
Punjab National Bank | 6.80% p.a. | 6.80% p.a.- 7.00% p.a. | 6.50% p.a. | 6.50% p.a. |
Punjab and Sind Bank | 6.30% p.a. | 6.00% p.a.- 7.45% p.a | 6.00% p.a. | - |
IDBI bank | 6.80% p.a. | 6.80% p.a.- 7.00% p.a. | 6.50% p.a. | 6.50% p.a. |
Canara Bank | 6.80% p.a. | 6.85% p.a.- 7.30% p.a. | 7.40% p.a. | 6.70% p.a. |
Indian Overseas Bank | - | 6.80% p.a.- 7.30% p.a. | 6.50% p.a. | 6.50% p.a. |
UCO bank | 6.50% p.a. | 6.30% p.a.-6.80 % p.a. | 6.20% p.a. | 6.10% p.a. |
Bank of India | 6.80% p.a. | 6.50% p.a. | 6.00% p.a. | 6.00% p.a. |
Bank of Baroda | 6.80% p.a. | 6.75% p.a.-7.10 % p.a. | 6.75% p.a. | 6.45% p.a. |
Indian Bank | 6.10% p.a. | 6.70% p.a.-7.10 % p.a. | 6.25% p.a. | 6.25% p.a. |
State Bank of India | 6.80% p.a. | 6.80% p.a. | 6.50% p.a. | 6.25% p.a. |
Bank of Maharashtra | 6.75% p.a. | 6.50% p.a. | 6.50% p.a. | 6.50% p.a. |
Karur Vysya Bank | 7.00% p.a. | 7.00% p.a. | 7.00% p.a. | 6.25% p.a. |
DCB Bank | 7.10% p.a. | 7.10% p.a.-8.05 % p.a. | 7.40% p.a. | 7.25% p.a. |
South Indian Bank | 6.70% p.a. | 6.50% p.a.-7.40 % p.a. | 6.70% p.a. | 6.00% p.a. |
City Union Bank | 7.00% p.a. | 6.50% p.a. | 6.25% p.a. | 6.25% p.a. |
Federal Bank | 7.00% p.a. | 7.15% p.a.-7.50 % p.a. | 7.10% p.a.-7.40 % p.a. | 6.60% p.a. |
IndusInd Bank | 7.75% p.a. | 7.25% p.a.-7.99 % p.a. | 7.25% p.a. | 7.00% p.a. |
Axis Bank | 6.70% p.a. | 6.70% p.a.-7.10 % p.a. | 7.10 % p.a. | 7.00 % p.a. |
Tamilnad Merchantile Bank | 7.00 % p.a. | 6.75% p.a.-7.10 % p.a. | 6.50% p.a. | 6.50% p.a. |
Kotak Mahindra Bank | 7.10% p.a. | 7.10% p.a.-7.40 % p.a. | 7.00% p.a. | 6.20% p.a. |
J&K Bank | 7.00% p.a. | 7.00% p.a. | 6.75% p.a. | 6.50% p.a. |
Karnataka Bank | 7.50% p.a. | 6.75% p.a. | - | - |
Dhanlaxmi Bank | 6.75% p.a. | 6.50% p.a.-6.75 % p.a. | 7.25% p.a. | 6.60% p.a. |
Thane Janata Sahakari Bank | 7.50% p.a. | 6.50% p.a.-7.50 % p.a. | 6.25% p.a. | 6.25% p.a. |
Saraswat Co-operative Bank | 7.15% p.a. | 7.00% p.a.-7.50 % p.a. | 6.75% p.a. | 6.75% p.a. |
Abhyudaya Co-operative Bank | 6.60% p.a. | 7.00% p.a.-7.60 % p.a. | 6.25% p.a. | 6.25% p.a. |
Eligibility criteria for NRE fixed deposits
To open an NRE fixed deposits, one needs to fulfil the following criteria:
- The individual needs to be a Non-Resident Indian (NRE) or a Person of Indian Origin (POI)
- They need to have NRE accounts
Documents required to open NRE deposits
To open an NRE deposit, an individual needs to submit documents like:
- Passport
- Valid work visa
- Address proof
Features of NRE Deposits
NRE deposits are laced with a variety of features. Some of them are mentioned below:
- Money can be deposited in Indian rupees
- The account can be closed at any time after they are opened
- Offers flexible tenures that may range from 1 year to 10 years
- Auto-renewal facilities are offered by banks where the FD renews itself once it matures.
- Some banks may even allow loans against NRE deposits
- Some banks allow up to 90% overdrafts on NRE deposits
- Some banks also allow NRE deposits to be held jointly
- Banks may even offer tax-saver fixed deposits to NRIs allowing them to claim tax benefits under Section 80C of the IT Act
- Banks have stipulations about what the minimum and maximum amounts that one can deposit
Interest rates offered on NRE deposits
The interest rates offered on a Non-Resident External deposit varies with the duration for which the deposit is opened.
The rates offered by various banks can go up to 8% per annum or more.
Benefits of NRE deposits
When an individual opens an NRE fixed deposit, he/she is liable to avail certain benefits. Some of them are as follows:
- Allows NRIs to open fixed deposits in India and earn impressive interest.
- They offer the depositors with ready funds when faced with an unforeseen circumstance as they can be closed prematurely.
- With banks providing overdraft and loan facilities NRE deposits ensures that the depositors can have money as and when they need it.
- The deposits offer nomination facility to the depositors
NRE deposits have certain benefits but they have certain drawbacks as well. One of the biggest drawbacks a senior citizen might face with NRE deposits is that the special interest rate for senior citizens on all other deposits is not applicable on NRE ones.
Difference between NRE and NRO accounts
Given below are some of the differences between NRE and NRO accounts
NRE | NRO |
Deposits are tax free. | Deposits are not tax free. Any interest earned will lead to adequate TDS being deducted. |
You can deposit your foreign earnings in Indian denomination in this type of account. | You can deposit your Indian earnings in Indian currency in this type of account. |
You can easily transfer your principal amount and interest earned from your NRE account. | There is a limit of $1 million before you can transfer your deposits in an NRO account. You will also have to pay the required taxes before the transferring of the amount from your NRO account to another account. |
Opt for this if you wish to keep your foreign earnings in Indian denomination and wish to keep it liquid. | This account is helpful if you wish to keep your Indian earnings in an Indian denomination. |
You can open this account with a close relative and another NRI only. | You can open this type of account with any resident in India and an NRI. |
FAQs on NRE Fixed Deposits
- What will happen to my NRE fixed deposit if I return to India?
When you return to India, you can continue to maintain your NRE fixed deposits until they reach maturity.
- What currencies can I use to fund an NRE fixed deposit account?
You can fund an NRE FD account with any currency that is convertible.
- Do I have to pay tax on NRE fixed deposit?
If you qualify as a ‘person resident outside India’ under the exchange control law, then the interest earned on your NRE fixed deposits will be exempt from tax in India.
- Can I take a loan against my NRE fixed deposit?
Yes, you can take a loan against your NRE fixed deposit of up to 90% of your deposit amount.
- Is the interest earned on NRE fixed deposit repatriable?
Yes, both the interest earned as well as the principal amount is fully repatriable.
- Is NRE FD a good investment?
Yes, NRE FD is a good investment option as you can get to earn decent returns on your deposits.
- Which bank gives the highest interest rate on NRE FD?
DCB Bank offers interest rates at 7.25% onwards. However, you must check the rate of interest offered by different banks as well.
- Is NRE FD tax-free?
Yes, deposits made in an NRE FD account are tax free.
- Can we have 2 NRE accounts?
No, you can have only one NRE account in your name.
- Is TDS deducted on NRE FD interest?
No, TDS is not deducted on NRE FD interest.
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