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) 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
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).
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.
As we have already established in our previous article “Is it the right time to book NRE Deposits in India” that NRE Fixed Deposits can amount for a very profitable investment source in India.
The time can’t be better. With the global market lodged by the hands of the outbreak of COVID-19, when everything is literally standing still, halted for the better. Why wait? Wondering whether It is the right time to book your NRE deposit in India? It’s the perfect time.
