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.
In this article:
- NRI Fixed Deposit
- Non Resident External (NRE) Fixed Deposit
- Fixed Deposit Rates in India for NRI: NRE FD
- Non Resident Ordinary (NRO) Fixed Deposit
- Foreign Currency Non-Resident (Bank) [FCNR(B)] Fixed Deposit
- How does Fixed Deposit work in India?
- NRI Fixed Deposit Calculator
- Fixed Deposit in India for NRI
NRI Fixed Deposit
You can opt for either of these NRI Fixed Deposits. To choose the right one, you need to understand about them in brief. Let’s glance upon these different types of NRI Fixed Deposit one by one:
- 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 7.25%* |
| SBI | Up to 7.10%* (Amrit Kalash) |
| Bank of Baroda | Up to 6.75%* |
| Canara Bank | Up to 7.25%* |
| South Indian Bank | Up to 7.40%* |
| ICICI Bank | Up to 7.10%* |
| HDFC Bank | Up to 7.25%* |
| Punjab National Bank | Up to 7.25%* |
| IDBI Bank | Up to 6.75%* |
| Kotak | Up to 7.20%* |
| DCB | Up to 8.00%* |
| Axis Bank | Up to 7.05%* |
| DBS Bank | Up to 6.50%* |
| Union Bank of India | Up to 7.00%* |
| YES Bank | Up to 7.75%* |
| SBM | Up to 8.00%* |
| IndusInd Bank | Up to 7.75%* |
| RBL | Up to 7.80%* |
| IDFC | Up to 7.75%* |
| Central Bank of India | Up to 6.75%* |
| Deutsche Bank | Up to 7.75%* |
- 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 8.00%* 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 table to check which Income Tax Slab you fall into and for further Taxation Advisory and assistance while filing returns, contact us through the button below.
New and Old Tax Regime Tax Slab Rates for FY 2023-24 (AY 24-25)
| Income Tax Slab | Old Regime Slab Rates for FY 23-24 (AY 24-25) |
|---|---|
| Up to Rs. 2.50 lakh | Nil |
| Rs. 2,50,000 -Rs. 5,00,000 | 5% |
| Above Rs. 5 lakh to Rs. 6 lakh | Rs. 12,500 + 20% |
| Above Rs. 6 lakh to Rs. 7.50 lakh | Rs. 12,500 + 20% |
| Rs. 7.50,000 to Rs. 9,00,000 | Rs. 12,500 + 20% |
| Rs. 9,00,000 to Rs. 10,00,000 | Rs. 12,500 + 20% |
| Rs. 10,00,000-Rs. 12,00,000 | Rs. 1,12,500 + 30% |
| Rs. 12,00,000-Rs. 12,50,000 | Rs. 1,12,500 + 30% |
| Rs. 12,50,000-Rs. 15,00,000 | Rs. 1,12,500 + 30% |
| Above Rs. 15,00,000 | Rs. 1,12,500 + 30% |
| Income Tax Slab | New Regime Slab Rates for FY 23-24 (AY 24-25) |
|---|---|
| Up to Rs. 3 lakh | Nil |
| Rs. 3,00,000 -Rs. 6,00,000 | 5% (Rebate u/s 87A available) |
| Rs. 6,00,001 lakh to Rs. 9,00,000 | 10% (Rebate u/s 87A available for taxable income up to 7 lacs) |
| Rs. 9,00,001 to Rs. 12,00,000 | 15% |
| Rs. 12,00,001 to Rs. 15,00,000 | 20% |
| Above Rs 15,00,000 | 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.
Now, you know about these Deposits. You can easily choose one depending on your needs. A question though, often barricades the next step of the process, which is:
How does FD work in India?
In order to understand how does fixed deposit work in India, we need to consider various aspects. The very basic thing to do would be getting an NRI Bank Account. There are two versions to that.
- You had a savings account while you were a resident, then you have to get your resident savings account to be converted to an NRO Account to operate it freely
- Open a new NRI Banking Account altogether for your foreign funds
After getting the accounts, you can directly opt for a Fixed Deposit online using your mobile phone under the type of account chosen. It’s an easy and convenient benefit. Still, confused about which FD to opt for? Let us give you a comparative analysis of these 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 8.00%* | Up to 8.00%* | Up to 6%* |
| 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 Fixed Deposit Calculator
Almost every major bank in India will provide you the benefit of calculating your Return on Investment (ROI) in case of an NRI Fixed Deposit. SBNRI too can guide you through the basic calculation of returns based on your investments and can also suggest on how to maximize these returns with a strong backup of highly experienced individuals. Contact us through the button below.
So, how is it? Is NRI FD a risk-free way to get returns? YES! It is. And that too is a very better option compared to the local banks abroad. In the final segment let’s conclude why NRI Fixed Deposit is one of the best mediums for investments in India and generating tax-free savings.
FD in India for NRIs/OCIs
Fixed Deposit in India for NRI is very underrated. With a massive influx of around USD 80 Billion as inward remittances, most of it is parked in savings account balances with low returns while there has been an alternative with higher returns all this time.
With the plethora of options lying around, it would be a wiser decision to opt for an NRI Fixed Deposit depending on your income source. To book your NRI Fixed Deposit Instantly, click on the button below.
Contact SBNRI
NRIs/OCIs living abroad can avail various banking and investment, taxation and banking services available in India, including NRO, NRE account opening, investment in India, tax filing, and a lot more. You can download SBNRI App to apply for an NRI account with nominal documentation in just 10 minutes.
You can also click on the button below to open an NRI account. Also, visit our blog and Youtube Channel for more details.
FAQs
Which bank has best NRI FD rates?
- Many banks in India offer great interest rates on NRI FD (NRE FD and NRO FD). You can find the list of banks with best NRI FD rates in the above blog.
Can NRI invest in fixed deposit?
- Yes. NRIs can invest in fixed deposit. You can find the detailed guide on NRI investment in Fixed Deposits in the above blog.
Is NRI FD tax free?
- The NRE Fixed Deposit is tax-free in India and both the principal amount as well as the interest can be repatriated completely while for NRO Fixed Deposit 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.
Is NRE account tax-free in India?
- Yes, NRE Fixed Deposit is tax-free in India and both the principal amount as well as the interest can be repatriated completely.
What is NRI FD benefits?
- NRI Fixed Deposits (FDs) present a secure investment avenue for Non-Residential Indians. With attractive interest rates, repatriability, and flexible tenure options, NRIs benefit from a stable and predictable return, making these FDs an advantageous financial choice.
What is the difference between NRE & NRI?
- An NRE account is established in India under the name of an NRI to hold foreign earnings, while an NRO account is opened in India in the name of an NRI to oversee income generated within the country.
Is interest on NRI taxable?
- The NRE Fixed Deposit is tax-free in India and both the principal amount as well as the interest can be repatriated completely while for NRO Fixed Deposit 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.
