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  7. NRI Fixed Deposit: NRI FD Interest Rates in 2024 and Benefits

NRI Fixed Deposit: NRI FD Interest Rates in 2024 and Benefits

Updated on: 21 May, 2024 12:13 PM

NRI fixed deposits resemble regular term deposits but are specifically opened through NRI bank accounts. Banks extend attractive interest rates to NRIs who deposit their earnings in these accounts. Indian banks generally offer three types of NRI accounts: NRE (Non-Resident External), NRO (Non-Resident Ordinary), and FCNR (Foreign Currency Non-Resident). If you want to know more about NRI accounts, read our full guide on NRI accounts here.

Contents

What is NRI Fixed Deposit?

An NRI Fixed Deposit (FD) is a savings option offered by Indian banks specifically for Non-Resident Indians (NRIs). It allows NRIs to invest their foreign earnings in Indian Rupees and earn attractive interest rates.

NRI Fixed Deposit Interest Rates in 2024

Here is the list of Indian banks that offer the highest interest rate for NRI fixed deposits:

Banks 1 year Above 1 year to 3 years 3 years to 5 years 5 years to 10 years
Axis Bank 6.70% 6.70% – 7.10% 7.10% 7.00%
Bank of Baroda 6.85% 6.85% 6.50% 6.50%
Canara Bank 6.85% 6.85% 6.80% 6.70%
DBS Bank 6.25% 5.25% – 6.50% 5.00% 5.00%
DCB 7.15% 7.15% – 8.00% 7.40% – 7.90% 7.25%
Deutsche Bank 7.00% 8.00% 7.00% 7.50%
Federal Bank 6.80% 7.05% – 7.50% 7.00% 6.60%
HDFC Bank 6.60% 6.60% – 7.15% 7.00% – 7.20% 7.00%
ICICI NRE FD Rates 6.70% 6.70% – 7.10% 7.00% 6.90%
IDBI Bank 6.80% 6.80% – 7.00% 6.50% 6.25%
IDFC First Bank 6.50% 7.25% – 7.75% 7.00% 7.00%
Indian Bank 6.10% 6.30% – 6.50% 6.40% 6.30%
Indian Overseas Bank 6.50% 6.50% – 7.25% 6.50% 6.50%
IndusInd 7.50% 7.25% – 7.50% 7.25% 7.00%
Kotak Mahindra Bank 7.10% 7.10% – 7.25% 7.00% 6.20%
Punjab National Bank 6.75% 6.80% – 7.25% 6.50% 6.50%
RBL 7.50% 7.50% – 8.00% 7.10% 7.00%
SBI 6.80% 7.00%- 7.10% 6.75% 6.50%
SBM 7.05% 6.5% – 8.10% 7.40% – 8.25% 7.4%
Union Bank of India 6.75% 6.50% – 7.25% 6.50% 6.50%
YES Bank 7.25% 7.25% – 7.50% 7.25% 7.00%

What are the Benefits of NRI Fixed Deposits?

NRI Fixed Deposits come with several advantages that make them an attractive investment option for Non-Resident Indians (NRIs). Here's a breakdown of the key benefits:

  • High-Interest Rates: Typically, NRI FD interest rates are higher compared to savings accounts offered to NRIs in their country of residence. This allows NRIs to grow their earnings at a faster pace.
  • Tax Benefits: Depending on the type of NRI FD account chosen, there can be tax advantages.
    • NRE (Non-Resident External) FDs: These offer tax-free returns on both the principal amount and interest earned. This is because the funds deposited are considered earned outside India.
    • NRO (Non-Resident Ordinary) FDs: Interest earned on these accounts is taxable in India. However, the principal amount can be repatriated without any tax implications. Calculate and file your taxes under the guidance of tax experts at tax2win. Book Consultation Today!
  • Safe and Secure: NRI FDs are a safe investment option as they are backed by Indian banks, which are generally considered stable institutions. Additionally, many banks offer nomination facilities, allowing you to designate an inheritor for the FD in case of an unfortunate event.
  • Repatriation Facility: A significant benefit of NRI FDs is the repatriation facility. This allows NRIs to easily convert their mature deposit (principal amount plus interest) back into foreign currency and transfer it to their overseas bank account.
  • Flexible Tenure: NRI FDs offer a wide range of tenures to choose from, ranging from a few months to several years. This allows NRIs to align their investment with their financial goals.
  • Loan Facility: Some banks provide loan facilities against NRI FDs. This can be helpful for NRIs who might need quick access to funds without having to break their deposit.

Frequently Asked Questions

Q- What is the best interest rate for NRI FD in 2024?

IDFC FIRST Bank provides NRE FD rates ranging from 6.75% to 7.25% for tenures spanning from 1 year to 10 years, effective from January 8, 2024. The highest interest rate of 7.25% is available for a 400-day tenure.

Q- Is FD tax-free for NRI?

As an NRI, it's essential to select the most suitable option based on your investment profile. While an NRE Fixed Deposit enjoys tax exemption, an NRO Fixed Deposit is subject to NRI taxation. Interest earned on an NRE Fixed Deposit is tax-exempt in India, whereas TDS is applicable on interest earned on an NRO Fixed Deposit.

Q- What are the types of NRI FD?

NRIs can open NRE, NRO, and FCNR fixed deposits. NRE and FCNR fixed deposits offer tax-free interest income, while interest earned on NRO fixed deposits is taxable in India.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.