NRI Fixed Deposit

NRI Fixed Deposits are the most sought after medium for NRI Investments in India. The NRI Fixed Deposits can be opted with the following 3 types of NRI Accounts: 

 

  • Non-Resident External (NRE) Account
  • Non-Resident Ordinary (NRO) Account
  • Foreign Currency Non-Resident (Bank) [FCNR(B)] Account 

 

Let’s understand these accounts in brief:

 

  • Non Resident External (NRE) Fixed Deposit: The NRE Fixed Deposit is used for parking the funds that you earn outside India. You can earn an interest up to 7.81% which is tax-free in India and both the principal amount as well as the interest can be repatriated completely. Let’s explore the top Indian banks and see who are providing the highest Fixed Deposit Rates in India for NRI on NRE FDs:

 

Fixed Deposit Rates in India for NRI: NRE FD

Banks NRE FD Interest Rates
Federal Up to 5.85%*
SBI Up to 5.40%*
Citibank Up to 4.23%*
Bank of Baroda Up to 5.40%*
Canara Bank Up to 5.50%*
Indian Bank Up to 5.40%*
ICICI Up to 5.50%*
HDFC Up to 6.25%*
Indian Overseas Bank Up to 5.75%*
Punjab National Bank Up to 5.50%*
IDBI Bank Up to 5.80%*
Kotak Up to 5.40%*
DCB Up to 7.35%*
Axis Bank Up to 5.80%*
DBS Bank Up to 5.25%*
Union Bank of India Up to 5.80%*
United Bank of India Up to 6.50%*
YES Bank Up to 7.25%*
SBM Up to 7.50%*
IndusInd Up to 7.81%*
RBL Up to 7.50%*
IDFC Up to 6.90%*
Central Bank of India Up to 5.35%*
Deutsche Bank Up to 7%*
  • Non Resident Ordinary (NRO) Fixed Deposit: The NRO Fixed Deposit is used to maintain the income for an NRI that is generated in India. It can come from any property that you have in India in the form of rent or maybe your pension etc. You can earn upto a 7.30%* interest rate on these accounts. Although, the interest that you earn on the funds is taxable in India at 30% along with surcharge and cess. You can later opt for a Tax Refund while filing your taxes as per your tax slab. Glance through the below mentioned table to check which Income Tax Slab you fall in.

 

Income Tax Slab Tax Rate
Up to 2.5 Lakhs Nil
2.5 Lakhs to 5 Lakhs  5%
5 Lakhs to 7.5 Lakhs 10%
7.5 Lakhs to 10 Lakhs 15%
10 Lakhs to 12.5 Lakhs 20%
12.5 Lakhs to 15 Lakhs 25%
15 Lakhs and above 30%
  • Foreign Currency Non-Resident (Bank) [FCNR(B)] Fixed Deposit: The FCNR (B) Fixed Deposit is a term deposit account in USD, GBP, EUR, JPY, AUD, CAD, SGD, HKD, and others. The ‘term’ in a term deposit account is a fixed tenure of up to 12 months, 24 months, 36 months, 48 months or 60 months that can be chosen by the NRIs at the time of account opening. You can earn up to 3%* interest on deposits. The interest income is not taxable in India and both the principal amount as well as the interest are completely repatriable.

 

After opening the NRI Bank Accounts, you can directly opt for a Fixed Deposit online using your mobile phones under the type of account chosen. It’s too easy and convenient. Still confused which FD to opt for? Let’s us stroll through a comparative analysis of these NRI FDs here:

Factors to consider Non Resident External (NRE) FD Non Resident Ordinary (NRO) FD Foreign Currency Non Resident (FCNR) Deposit
Purpose For income earned outside India For income earned from India (pension, rent etc.)  Foreign Currency Investment in India
Currency INR INR USD, GBP, EUR, JPY, CAD, AUD, SGD, HKD and CHF
Joint Account Holding Only NRI Both NRI and Residents Only NRI
Tenure of Deposits 1 year to 10 years 7 days to 10 years 1 year to 5 years
Interest Up to 7.81%* Up to 7.30%* Up to 3%*

Repatriation

(transfer of money from Indian bank account to foreign bank account) 

Both Principal (money invested initially) and Interest completely repatriable Up to a maximum of 1 million USD per financial year Both Principal and Interest completely repatriable
Tax Deductions No tax Tax on Interest earned (not on principal amount): 30% tax + surcharge + education cess will be deducted at the source of interest earned in India No tax
NRI Deposits bring in more dollars during lockdown: Coronavirus India 2020

NRI Deposits bring in more dollars during lockdown: Coronavirus India 2020

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Recently, we established that in spite of the ongoing pandemic, NRI Fixed Deposits in Kerala crossed Rs. 2 Trillion mark. This is just one of the many states in coronavirus inflicted India. Scaling the figures on a national scale reveal that the total NRI Deposits touched $135.36 billion as of July 2020. The same figure was $130.58 billion for March 2020, $133.12 billion in 2019 and $124.44 billion in 2018 as per the latest data from Reserve Bank of India (RBI).

NRI Fixed Deposit: The Basic 2020 Guide

NRI Fixed Deposit: The Basic 2020 Guide

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An NRI Fixed Deposit is one of the safest ways to earn tax-free interest in India. You can choose between the options of an NRE, NRO or an FCNR Fixed Deposit in India as an NRI and start procuring returns on the funds parked in these accounts. Let’s explore how to do that in this article.