Fixed Deposits for NRIs: Latest 5-Year Rates and Benefits: One investment option that remains popular among non-resident Indians (NRIs) is fixed deposits (FDs). This investment is simple to operate and manage, offers guaranteed returns, and is governed by clear regulations. There are a few types of fixed deposits that NRIs can choose from. Non-Resident External (NRE) Account NRE accounts allow deposits in a foreign currency which are then converted to Indian rupees. Both principal and interest can be fully remitted and the interest earned is tax-free in most cases. NRO (Non-Resident Ordinary) Account NRO accounts are primarily meant for income earned in India, such as rent or dividends. The interest earned is taxable as per the applicable tax slab. FCNR (Foreign Currency Non-Resident) Account Under FCNR accounts, deposits are maintained in foreign currency, reducing exchange rate risks. Both principal and interest can be remitted and interest earned is tax-free in India. Things to Keep in Mind KYC requirements: NRIs must complete Know Your Customer (KYC) formalities by submitting documents such as passport copies, visa details, and overseas address proof to open their FD accounts. Taxation: Interest earned on NRE and FCNR accounts is exempt from tax in India. However, interest earned on NRO accounts is subject to Tax Deducted at Source (TDS) at 30%, plus applicable surcharge and cess. Tenure and withdrawals: Fixed deposit tenures vary across banks, generally ranging from 1 to 10 years. While NRI investors are allowed to make premature withdrawals, the bank may levy a penalty for doing so. Benefits of NRI Fixed Deposits Safe investment: NRI FDs are not linked to market risks and offer guaranteed returns. Repatriation facility: Investors can easily transfer the funds to their country of residence. Currency diversification: FCNR accounts allow deposits in foreign currency and thus mitigate currency fluctuation risks. Higher interest rates: Interest rates on NRI FDs often tend to be higher compared to those offered in other countries. Important Points Currency conversion risks: Investments in NRE accounts are subject to currency conversion, which can impact returns. Double taxation: Though interest on NRE and FCNR accounts is tax-free in India, NRIs must check their tax liability in their country of residence. Withdrawal penalties: Check for penalties on premature withdrawals and lock-in periods for specific schemes. Fixed deposits offer NRIs a safe and reliable way to grow their savings while staying abroad. By understanding the rules and choosing the right account type based on their financial goals, NRIs can make the most of these deposits. If you are an NRI planning to invest in fixed deposits, take a look at the latest interest rates for FDs with tenures up to 5 years in private sector banks. Bank Name 1 – < 2 Year 2 – < 3 Year 3 – < 5 Year Axis Bank Ltd. 6.70%-7.25% 7.10% 7.10% Bandhan Bank Ltd. 7.25%-8.05% 7.25% 7.25% Catholic Syrian Bank Ltd. 5%-7.75% 5.75%-7.10% 5.75% City Union Bank Ltd. 6.60%-7.10% 6.60% 6.25%-6.60% DCB Bank Ltd. 7.10%- 8.05% 7.50%-7.55% 7.40%-7.75% Dhanlaxmi Bank Ltd. 6.75%-7.25% 6.50%-6.75% 6.50%-7.25% Federal Bank Ltd. 6.80%-7.35% 7.05%-7.40% 7%-7.4% HDFC Bank Ltd 6.6%-7.25% 7%-7.35% 7%-7.40% ICICI Bank Ltd. 6.7%-7.25% 7%-7.25% 7.00% IDBI Bank Limited 6.80%-7.35% 6.80%-7% 6.50% IndusInd Bank Ltd 7.75% 7.25%-7.75% 7.25% IDFC First Bank Ltd. 6.50%-7.75% 6.80%-7.25% 6.75%-6.80% Jammu & Kashmir Bank Ltd. 7.00% 7.00% 6.75% Karnataka Bank Ltd 7.35%-7.50% 6.5%-7.35% 6.50% Karur Vysya Bank Ltd. 7%-7.50% 7%-7.60% 7.00% Kotak Mahindra Bank Ltd 7.10%-7.40% 7.15% 7.00% RBL Bank Ltd. 7.50%-8.10% 7.50%-8% 7.10%-7.50% South Indian Bank Ltd. 6.50%-7.40% 6.5%-7% 6.70% Tamilnad Mercantile Bank Ltd. 7%-7.50% 6.75% 6.50% YES Bank Ltd. 7.25%-7.75% 7.25% 7.25% Data taken from the respective bank's website as of November 25, 2024. Compiled By BankBazaar.com
