NRIs can deposit their foreign money in a Non-Resident External or NRE Account, which can be a Savings, Recurring, or Fixed Deposit Account. In India, an NRE deposit is held in Indian Rupees and is tax-free.
NRIs can deposit their foreign currency into an India account using a Non-Resident External (NRE) FD account. The NRE account is denominated in Indian rupees and is tax-free. NRIs, PIOs, and OCIs can invest in NRE deposits using their NRO and NRE accounts.
The tenure of the Fixed Deposits varies from one to ten years. Furthermore, in India, both the investment and the interest earned on an FD are totally tax-free. They are eligible for the tax break - under Section 80C of the Internal Revenue Code.
The table below represents to you some of the NRE interest rates for 2023:
Banks |
Interest Rates |
DBS Bank |
4.50% - 4.35% |
Indian Overseas Bank (IOB) |
5.20% - 5.25% |
Central Bank of India |
5.00% - 5.15% |
IDBI Bank |
5.05% - 5.50% |
Bank of Baroda |
4.90% - 5.25% |
Canara Bank |
5.00% - 5.25% |
PNB |
5.00% - 5.25% |
HDFC Bank |
5.00% - 5.45% |
SBI |
5.10% - 5.50% |
Yes Bank |
5.75% - 6.25% |
ICICI Bank |
5.00% - 5.45% |
Axis Bank |
5.10% - 5.75% |
Kotak Mahindra Bank |
5.10% - 5.50% |
Bank of India |
5.00% - 5.05% |
Indusind Bank |
6.00% - 6.50% |
Citibank |
2.75% - 3.50% |
Oriental Bank of Commerce |
5.00% - 5.25% |
Ujjivan Small Finance Bank |
6.50% - 6.25% |
AU Small Finance Bank |
5.00% - 6.10% |
Equitas Small Finance Bank Limited |
6.00% - 5.25% |
ESAF Small Finance Bank |
6.50% - 5.25% |
NRIs can readily invest their foreign currency in a Non-Resident External Fixed Deposit (NREFD). They must, however, meet the eligibility requirements. Foreign currency is remitted to an Indian bank account by NRIs. NRE accounts are denominated in Indian rupees and are tax-free. NRIs are not permitted to register a regular account under the Foreign Exchange Management Act (FEMA).
To open an NRE Fixed Deposit in India, you must meet the following requirements:
Mentioned below are the major features of an NRE deposit:
1) Tenure: |
The tenure of the investment ranges from 1 to 10 years. |
2) Deposit Currency: |
The money is deposited in the Indian currency, and you can start the account through net banking. |
3) NRE FD Rates: |
NRE fixed deposit rates range from 8% for a year and can be calculated with an NRE deposit calculator. |
4) Auto-Renewal: |
The NRE deposit has the facility to be automatically renewed. |
5) Insurance Coverage: |
NRE deposits are covered by the DICGC insurance, and the investors can claim up to Rs. 5,00,000 compensation in the case of defaults. |
6) Nomination Facilities: |
You can choose to nominate a person for the scheme. |
7) Loan Against FD: |
You can also avail up to 95% of the sum against a loan or overdraft. |
8) Deposit Limit: |
The deposit limit of the scheme differs from bank to bank. |
An NRE FD is a form of term deposit account in which an NRI deposits money from abroad and remits it to an Indian account, where the money is converted into rupees. An NRE deposit is a type of term deposit used to deposit foreign profits.
An NRI will often register an NRO account in order to manage their money earned in India. Rent, pensions, and other sorts of dividends can all be used to supplement your income. The interest collected on these savings accounts is taxed.
An NRO account, and hence an NRO fixed deposit, can only be opened with funds originating in India. To open a fixed deposit from your NRO, you cannot transfer funds from another country. Funds from an NRE account, on the other hand, can be moved to an NRO account in order to open a fixed deposit.
NRE accounts are established by depositing foreign currency earned abroad into a fixed deposit account. It is not feasible to open an NRE fixed deposit by moving money from an NRO or a resident savings account.
Mentioned below are the advantages of investing in an NRE account: