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NRE FD Rates Comparison September 2016 – Fixed Deposit Rates

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nre-fixed-deposit

NRE Fixed Deposit is one of the best investment for NRI, if they are looking to invest their money in India. In this post, I have compared the NRE FD Rates offered by different banks in India.

Benefits of NRE FD

  • 1) Interest earned on NRE FD is tax free in India.
  • 2) Currently exchange rates for INR are higher, so you will get more INR for your foreign currency.
  • 3) Banks are offering good Interest rates on NRE FD, as RBI wants more foreign currency inflows into the country.

NRE FD Rates Comparison September 2016

nre-fd-rates

  • Latest ICICI Bank NRE FD Rate – Link
  • Latest SBI Bank NRE FD Rate – Link
  • Latest Axis Bank NRE FD Rate – Link
  • Latest PNB Bank NRE FD Rate – Link
  • Latest Yes Bank NRE FD Rate – Link
  • Latest HDFC Bank NRE FD Rate – Link
  • Latest Kotak Bank NRE FD Rate – Link
  • Latest Dhanlakshmi Bank NRE FD Rate – Link
  • Latest IndusInd Bank NRE FD Rate – Link
  • Latest IDBI Bank NRE FD Rate – Link
  • Latest Bank of Baroda NRE FD Rate – Link
  • Latest Deutsche Bank NRE FD Rates – Link
  • Latest CitiBank NRE FD Taes – Link
  • Latest Union Bank of India UBI NRE FD Rates – Link
  • Latest RBL Bank NRE FD Rates –   Link

Key points to note

  • Minimum duration for NRE FD is 1 year. Bank will not pay any interest if you withdraw FD before 1 year.
  • If you withdraw money from FD pre-maturely, then bank may deduct penalty of 0.5-1% from the interest paid.
  • If the FD rates at your bank are lower than other banks, please make sure that the difference is good enough for opening a new bank account. A difference of 0.50% on Rs 1 lakh FD will be Interest of Rs 500 per year.
  • Also, keep in mind at the end of FD tenure, exchange rates may depreciate further. So if you want to take money back from India at end of FD tenure, then your earning may be wiped out because of unfavorable exchange rates.
  • Though NRE FD Interest is tax free in India, it may be possible that your global income is taxable in your home country (USA, etc).

If you have any queries related to this article or any other personal finance query ( Investment, Taxation etc), please comment below

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About wealth18

The author is a Chartered Accountant and loves to write about Personal Finance, Wealth Management, Taxation etc. Disclaimer - The articles on this website is for informational and knowledge purposes and should not be treated as financial advice, Please consult your financial advisor before taking any investment decision.

87 comments

  1. Bhuvanesh Ramamurthi Obla

    Dear Sir,

    Useful information.

    Thanks
    Bhuvanesh

  2. Hi,

    I liked new web looks with more basic information.

    Thanks

  3. Good informative, If you can provide the FCNR deposit rate along with approx forward contract rate for all those deposit period from the different bank, it will be more useful. Thanks & Regards, Rajkumar

    • Hi Raj, The FCNR rates are normally same for all banks as it is regulated by RBI. Regarding the forward rates as it changes quite frequently (theoretically every moment), it is not possible to get the rates from all banks at one point in time.

  4. Hi Vivek,
    I’m palling for NRE RD for one year, what is negative point for RD scheme?
    Thanks in advance.

    • Hi Yogi,

      NRE RD is also good as it fixes the interest rate for defined time. Interest is anyways tax free.
      Just that you need to contribute defined amount in every period

  5. Hi Vivek,

    Is it worth to invest as NREFD or other Tax free Investment available in India, Pl advice.

    Thanks in advance

    • Many tax free instruments in India are not available for NRI. Also, as the interest rate are same, you can choose either of them.

      NRE FD has advantage that you can do premature withdrawal and there is normally no penalty after 1 year.

      But if you have invested in Tax free instrument, there may be liquidity issues. As these are normally listed, you may be able to sell them in secondary market but prices may not be favorable and will fluctuate based on Interest rate market.

  6. Thanks for the very informative posts

    Are the NRE FDs tax free(i.e the interest earned in India), are the principle and the interest amount totally repatriable without RBI permission, and can they be paid into a Indian account (NRE or otherwise)

  7. Please BEWARE of ICICI NRE FD..Its is not the effective interest rate that they advertise..

    Please note that on their website it says

    *Percentage Per Annum after quarterly compounding

    This means the interest shown on website is after compounding..

    So unlike other banks where the interst is deposited every quarter and then compounded, in ICICI the interest is calculated after compounding..
    This is not a small issues as overa a peroid of 3-5 yrs its a huge loss..

    I had discusion over phone with ICICI officer, and that compared to depositing interest quarterly and then compounding annualy, I was making loss..

  8. Hey vivek…..!

    I’m a Nri and have completed my Nri status for FY 2014-15. I’m planning to deposit 5,00,000 inr in PNB NRE FD for 2 yrs which will be yielding me 9% interest.
    But it will not be possible for me to complete the Nri status for next yr I.e. FY 2015-16.
    kindly suggest should I still create a Nre FD or wait. Since I guess I’ll be taxed for the nxt yr for not being a Nri.

    Making it short, should a Nri be complying with his Nri status throughout the Nre FD tenure.

    Need ur valuable comment.
    Thanks in advance.

    Rgds
    ankit

    • yes, nri will get the tax free interest from nre fd till when he remains nri. If you come to india permanently you need to inform the bank, and they will convert it into normal fd.

  9. Hi Vivek,
    I have one small doubt, can you please help me to understand the situation,
    I had opened on NRE FD on 5th January 2014 for maturity on 5th January 2016 (24 months) with interest rate 9%. But I need to go back to India on July 2015 (19th Months of FD ).
    So my question,
    1. DO I need to inform bank immediately once I go back to India to convert the NRE FD to normal Residential FD? Or I can wait some time before informing bank.
    Note: From July 1st I will start work in India.
    2. Let say I informed back on June 30th , 2015 to convert my FD to normal FD, so my assumption interest earned from January 2014 to June 2015 will be Tax free (when the status was NRE FD)
    And ONLY ** from July ,2015 to January 2016 (When status will called as Residential Normal FD) will be taxable**. Can you please confirm if my assumption is correct?

  10. Babu Narayan Swami

    Vivekji: Very useful information. I would suggest that you should recommend best investment opportunities also from next month. Why I request you is that there are lots of long term investment policies which are usually yield much more percentage of interest than of FD. This is only my suggestion please.

    • thanks for your suggestions. I will try to post some other options as well.
      What kind of long term investment policies are you talking about ?

  11. The NRE Deposit rates given in the table above are wrong by a mile. I think none of those rates exist anymore, and its still January. Frankly, the DB rates had changed in December 2014 itself.

    This, the information above is misleading.

    Cheers

  12. I am planning to make nre fd of 10 lakh in union bank of india for 12 months.
    Need to know the complete amount I will receive at the completion of my term suppose interest rate is 8 percent

  13. Hello Vivek,

    I would like to know if you can advice on investments which are safe to invest as we are based out of India and can better retuns than FD as well we can mointor ourself.

    Thanks,
    Lata

  14. Hi Vivek,

    I am planning to go back to India probably with in this year. I am NRI since 2012
    I want to open a FD in India, will it be tax free if I go back to India, say in the month of June-2015.
    Shall I open FD or not?

    • Ideally when you are back in India, you need to inform your bank within 6 months. They will then reclassify the FD as resident and then the interest will be taxable in India.

  15. Hi Vivek,

    I am very happy that I stumbled upon your excellent website that gives all the information that I need. I have 2 questions which I am hoping you can answer.
    1. I am in UK on work visa and intend to return to India sometime next year. If I opt for an NRE FD for 5 years now, and return to India next year would the FD still continue to earn the interest rate as you mentioned above or would it change next year because I returned to India and am no longer an NRI.
    2. Other than NRE FD what other investment options are good for NRIs in the longterm who would eventually return to India?
    Cheers mate!

    • Typically NRE FD rate & Resident FD rates are similar. So it will not make much different in terms of Rates.
      The main difference will be regarding Taxation.While NRE FD is tax free in India, the normal Saving FD Interest is taxable.

      As per the rules, one need to notify bank after becoming the resident within 6 months.Once you do that, Bank will reclassify your account as Normal resident account. Then any interest earned on such FD will be taxable.

      Some people donot notify the bank and keep the NRE FD, but there are operational issues around out of date communication address in NRE Account etc.

  16. Dear Vivek,
    I am planning to return to India.I have parked funds in NRI fixed deposite tenures . As I am planning to returns to India I want a suggestion to avoid the tax which I will be paying .What is the way ….Should I withdraw thw amount and divert it in others name to ensure the amount remains non taxable or any other suggestion?

    Naresh

    • Hi Naresh,

      You can keep the money into NRE account for approx 6 months, as the requirement is to inform the bank within 6 months of returning back.

      You can also gift the money to your parents and they can make FD in their name.

  17. bobby mirchandani

    WHAT IS THE NORMAL FEES FOR FILING NRI TAX RETURN. BASICALLY I HAVE TO FILE FOR A REFUND OF TDS OF CAPITAL GAINS.HOW CAN I CONTACT YOU ON PHONE.I AM BASED IN USA

  18. HI Vivet,

    PLS ADVISE ATAL PENSION PLAN CAN TAKE NRI. If YES THEN HOW CAN I APPLY.

    Thanking you in advance.
    Nimesh

    • Hi Nimesh,

      Atal Pension Yojana is only available for resident Indians. Is there any particular reason you are looking at this product.

      There may be other options to achieve your goal.

  19. Hi Vivek,

    Thanks for the helpful post. I have a HDFC NRE account and I have decided to book a FD with the bank (I am aware that FD interest for NRIs is tax free). Do I need to fill form 15G/H for TDS waiver or, do I have to claim the amount back back after the tax year?

    The bank has send me a message to fill in 15G/H but I always thought 15G/H is for residents and not NRIs.

    Any advise on how tax works on FD for NRIs would be helpful.

    Thanks in advance,
    Kiran

    • Hi Kiran, FD interest in NRE account is tax free and no TDS is applicable. Also, no Form 15G/h is required.

      Make sure that you are making the FD in your NRE Account and not in any old “Resident” Account.

      Which country are you based in ? As if you are based in US, there may be tax implications in US.

  20. Hi Vivek,

    As safety concern can you please suggest good banks for NRI FD?
    Is private banks safe for NRI FD?

    Thank you
    Sandeep

    • Hi Sandeep, Big Private Banks are equally safe. I think in normal circumstances, I will think that Banks like ICICI, HDFC, Axis, Kotak, Yes Bank etc are safe..

  21. Thanks for useful and basic post. Apart from NRI FD , Mutual fund and Property any good investment option are exist

    • Hi Kartikey, You are right that there are other investment options. this post is just to give comparison of NRE FD Rates.

  22. sir,

    i am 48 year old. i have 5 lakh, and want to invest in mutual fund for 3 to 5 year plan.Bank FD are not suitable for me. please suggest me.

    • Hi Sushil,

      As you have put query under NRE FD article, would like to check your residential status – whether in India or NRI. Which country ? As many mutual funds do not allow US investors.

      Have you invested in MF before ? and are you Ok to take some risk related to Equities or looking for a risk free alternative.

  23. Hi Vivek,
    I’m looking to FD about 10000$ for a period of 5 years.Please suggest good bank.Also do you know if I want to get back the money to USA after 5years, do I need to pay tax to USA govt.?

    • Hi Santo,

      Do you have NRE Account?
      Also do you want to make FD in USD or INR? becuase if you need money in USD after 5 years, there will be exchange rate risk. and there is a risk that Interest earned may be wiped out because of unfavourable exchange rate.

      If you are US tax payer, then you need to show your global income and pay tax on it.

  24. Hi , i would like to know about RBL bank,
    wanted to open current & saving AC with them how is the bank performing ? the banker is really kind and gives good services

    also I have read about MF in this website, wanted to invest in SIP,
    total in 3. in different category 1. bluechip 2. midcap 3.microcap
    which company and MF do you suggest? and the ratio for same ( am expecting to do 20k for each )

    your comment will help me a lot

  25. I am NRI for past 23 years and plan to return to India by end 2016.
    One of the bank wealth offices suggested I invest in 40% of saving in Deposit on forward basis in Yen or GBP or Euro for 5 years so that –
    (1) Even after becoming resident indian, I will be allowed to retain the deposit in foreign currency which will render the interest earned tax free.
    (2) The yield can be as high as 11.25%.
    Please advise if the above is true.
    Regards,
    Ashok Kumar

    • Hi,

      I think your are talking about FCNR deposit with forward cover. I wrote about it in the past. See below:

      http://wealth18.com/fcnr-deposit-with-forward-cover-swap-yield-14-should-nris-invest/

      Which bank is offering you this product? Note that the yield of 11.25% is not that attractive as NFD FD will have similar yield (9% interest will have similar yield)

      • Dear Sir, I am a British Citizen with OCI. I retured few wks before to India after 15 yrs in UK. I have joined in a corporate hosp in India. I have NRE FDs.
        1. Being British citizen can I continue with NRE FD or I have to change my account to Resident status within 6 months?.
        2. If I have to change to Resident status, is it better to change Rupees back to Pounds to UK bank before expiry of repatriation ?
        3. Is there any advantage of FCNR forward contract (FCNB) with interest less than 3% as seen currently compared to FD
        Tx

        • After change of account from NRE to Resident,
          1. can rupees be used to pay university fees in UK for my children? (rupees to pounds).
          2. Can Resident (normal) account be used to pay NRI quota in Indian colleges?

          Many thanks in advance for your advice and time.
          Regards
          Rajavelu

          • 1) Yes, the INR account can be used to send money to UK. You just need to visit the bank and submit forms with the details for transfer.

            2) I am not 100% sure, but as the money need to be paid in INR, I don’t think there should be any issue with the payment from resident account.

        • The options will depend where you need to money in future – whether in India or overseas.

          1) If you stay in India for more than 6 months, you residential status will be resident but not ordinary resident (RNOR).

          A person is an RNOR if he meets either of these two conditions: -He/she has been non-resident in India, that is, an NRI, in nine out of the ten previous years preceding that year, or -He/she has, during the seven previous years preceding that year, been in India for a period of 729 days or less

          Now depending on the date of return, a person can take the benefit of the RNOR status for up to 3 tax years in India.

          For Indian income tax purposes, an RNOR is treated at par with NRIs. An RNOR needs to pay tax in India only on his Indian income. Any income from abroad will not be taxed in India.

          2) Repatriation will depend on whether you need money in India or UK ?

          3) It may be beneficial if you need money in Foreign currency in future.

  26. Dear Vivek,
    I am an NRI. I would be grateful if you could let me know HDFC bank is a safe bank to have Fixed deposits. In general people say that the govt. banks like sbi, bob etc. are safe to have fixed deposits as government will step in if something happens to these banks… How about private banks like HDFC bank ? Thanks for your time.

    • Hi Rajesh,

      HDFC bank is one the largest private sector bank in India. The banking regulation applies same for all banks – be it government or private.

      If something goes wrong, at HDFC, it is likely that government will step in as well due to its wider impact on financial markets.

  27. What is the penalty of ICICI bank in case am withdraw my cash from FCNR FD before the one year, suppose I deposit the money for one year.And is there any opinions to keep my cash with FCNR FD and I can use any time without any penalty, actually I need to make some wire transfer in Euro then it wil be avoid the conversion charges from bank..

    • Hi Roshit, When did you made this FCNR deposit and what is the original period.

      As ICICI Bank doesnot allow pre mature withdrawal for FCNR(B) of 23 years or more which is started from Oct 2013.

  28. Please explain the effect of RBI’s new base rate calculation method on Fix Deposit Intrest Rates.

    • Hi Jawed, the base rate calculation is for calculating rates for loans (not directly for FD). However, with the new base rate calculation, it will be easier for the banks to pass on the benefits to consumers in case of repo rate cut by RBI.

  29. Hello..great information..Is ir true that Deutsche Bank offer 9% for FD for 5 yrs?? If it is true what is the minimum balance tobe maintained in the a/c??

    • Even I was surprised to see that. But that the interest rate mentioned on their website. You can also check the Deutsche bank link on my post above.

  30. Dr Shobna Handa

    Dear Vivek,

    I want to know that while calculating 180 days for NRI status, are these days calculated according to financial year or calender year.I am an Nri but will be returning for good by end of Aug 2016. I will be in india for 38 days between jan 2016 till 31 st aug 2016. Is investing a large amount intax free bonds safe for yearly regular income post retirement?

    Dr Shobna

    • Hi Shobna, For NRI status, the number of days is calculated per financial year.

      Regardign Tax free bonds, it depends on your investment risk apetite, time horizon, age , commitments etc.

  31. Dr Shobna Handa

    Hi Vivek,
    If someone is retiring, is it safe to Invest in Debt/liquid/Bond/corporate opportunities funds for regular returns. What is the tax liability for the income through these funds.

    • Hi, These funds do not provide a regular monthly income. However, you can withdraw money systematically every month from your capital.

      Short term gain (if sell before 3 years) – taxable as per tax slab of investor
      Long term gain (if sell after 3 years) – 20% (with indexation)

      Any dividend paid by MF company is tax free in hands of investor, but the MF company has to pay 25% Dividend distribution tax (in case of debt funds).

      You should consider traditional options like Bank FD etc that will give similar returns.

  32. Hi Vivek!

    Very useful information you are providing here, thank you so much!

    I want to keep my question short and simple.
    What is more favorable, NRE-FD or FCNR and why?

    Your answer will help many of us who are stuck in dilemma between both of these options.

    Thank you very much.

    • Chirag,

      Bot NRE FD & FCNR are two different products and serve different purpose.

      NRE FD is in INR and FCNR is in foreign currency. If you need to take money back to foreign country after maturity and donot want to take currency risk,then you can go with FCNR. But if you want to keep the money in INR, then go for NRE FD. You are free to take NRE FD money to foreign country, its just tat you will assume currency risk.

      See some more details below:
      http://wealth18.com/nri-bank-accounts-nre-nro-fcnr/

  33. Dear Vivek,

    Any info on Deutsche bank, though its offering high interest rate I guess its because they are in big trouble in there working and the new CEO is trying to save it, the bank may remain in red this year too, and as deposits in India are not insured so if the bank is out of market the deposits are at risk.

    • Hi Prabhat,

      Deposits in India are insured upto Rs 1 Lakh.

      Also, Deutsche Bank in India operates on a separate legal entity basis. Even though they are struggling now, but I donot see a possibility that they will go out of business in next few years.

  34. Dear Vivek,

    I’m returning back to this page EVERY SINGLE DAY to see if I get any suggestions from you, but there was no reply. I thought maybe you are busy or haven’t seen this post in a long time but I was so disappointed when I saw your response to more recent post than mine.

    Anyways, you could just say “I don’t know”.

  35. Respected Sir, I have read the above question and answers, but still I want to ask you that I wish to open a NRE FD for 3 years of 10 lakh rupees so what are the conditions?
    My questions are as follows:
    (1) Do I have to be a NRE for that financial year in which I am opening an account?
    (2) What if I don’t complete my NRE status the remaining 2 years?
    (3) If I complete 3 years of NRE status then while filing tax returns in the next year do I have to show the money received from FD as income from other source ?
    (4) Do I have to invest the amount received to escape from the tax?
    Thank you in advance.

    • 1) You need to have NRE account to open NRE FD. Ideally you should be NRE in the year of opening account.
      2) If you are not NRE in next 2 years, you need to inform bank and bank will either close or change the status of FD making it normal resident FD. However, many members donot inform bank and continue holding the NRE FD. Banks are strictly not enforcing this rule.
      3) Money received at maturity is not an Income. Only the Interest received on FD is Income, However, in case of NRE FD, the interest is tax free and not required to be shown in Income tax return.
      4) If you are non resident and receive NRE FD Interest, then it is tax free.

  36. Hi Vivek,

    I am NRI for last 14 years and not filed Income tax for last 14 yrs.

    I plan to return to India for good something end 2016 or early 2017.

    Should I file income tax now or only after returning back to Inida. Simple reason been for 14 yrs no assets (say property or Fds,etc ) is shown to IT and suddenly when you reveal your asset to IT dept it could create trouble although all our legal. You know common man is afraid of IT issues. Please advice how to go about.

    • Hi,

      Did you had income in India in last 14 years – FD interest etc? If your income was below tax slab and you have not filed return, then there is no issue.

      Once you are back in India and your total income is above tax slab, then you can file return.

  37. Great information. You know what would be awesome, I plan on doing this myself, is an analysis of depreciation V rate…and if it’s worth it converting to INR.

    Also, if you can put something like this together for maintaining USD/home currencies that would be extremely helpful too!!

    Thanks again,
    Avanti S.

    • Hi Avanti,

      Over the long term, the interest rate parity will prevail, otherwise there will be risk free arbitrage opportunity.

      So for e.g. over last 1 year, INR has depreciated by only 2% (seems like good opportunity)
      But over last 2years, it is depreciated by 10% (approx 5% each year)
      Over last 5 years, it is depreciated by 36% (approx 7% each year) wiping off any gains from high interest rate.
      Over last 10 years, it is depreciated by 47% (approx 4.7% each year).

      NRE FD are good for those who intend to keep money in INR & for using in INR.

  38. Hello Sir, I see RBL is offering the best rate on NRE FD & Savings now. I never heard about RBL until now. May we know is that is a reputable bank ? How will i know a small private bank is safe or not?

    • Hi Suman, All banks are monitored by RBI and are subject to same stringent rules.

      RBL is very old bank, previously known as Ratnakar Bank Limited. It was setup in 1943 and now transformed itself in one of the fastest growing private bank. As per their website, RBL Bank has been recognised by the World Economic Forum as a ‘Global Growth Company’ (GCC). It has also been awarded as ‘India’s Best Bank (Growth)’ in the ‘Small-Sized Bank segment’ by Business Today-KPMG Best Bank Study for four consecutive years – 2012, 2013, 2014 and 2015.

  39. Information is old.
    HDFC does not offer 7.25%. It offers 6.95% at top most.
    So far I think RBL Bank offers highest rate that is 7.85%.

    • Hi Jay, I had updated the chart in Sep, will update for Dec soon.
      I have also given link to the bank’s website to get the current interet rate.

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