NRE fixed deposits: Check the latest interest rates of public sector banks here

NRIs can invest in fixed deposits through NRE FDs, wherein the investment can initially be done in a foreign currency but the FD is maintained in Indian Rupees

By: Express Web Desk

October 25, 2024 12:39 PM IST

2 min read

Interest earned on NRE FDs is tax-free in India.

Fixed deposits have been a popular yet low-risk investment that allows you to grow your wealth securely. But, did you know, this option is open not only to domestic investors but Non-Resident Indians (NRIs) too?

NRIs can invest in fixed deposits through NRE FDs, wherein the investment can initially be done in a foreign currency but the FD is maintained in Indian Rupees (INR). The minimum tenure for this type of FD is generally 1 year but depending on the bank, the maximum tenure can go up to 10 years. Interest rates for NRE FDs are similar to domestic FDs but may vary from bank to bank. The interest is compounded quarterly or half-yearly, depending on the bank’s policies. NRIs can take loans against their NRE FDs up to 90% of the FD amount, subject to the bank’s terms. These loans can be used for personal or business purposes in India, but not for investments in real estate.

The other important aspect of this type of FD is it’s tax treatment. Interest earned on NRE FDs is tax-free in India. Additionally, the principal and interest earned on NRE FDs is fully repatriable which means the investor can transfer the funds back to their country of residence without restrictions. Premature withdrawal of NRE FDs is also allowed but doing so may attract penalties or a reduction in interest rate, which can also vary depending on the bank’s policy.

If you are an NRI planning to invest in fixed deposits, take a look at latest interest rates of FD of tenures up to 5 years for public sector banks.

Bank Name	1 – < 2 Year	2 – < 3 Year	3 – < 5 Year
Bank of Baroda	6.85%-7.30%	7%-7.15%	6.80%-7.15%
Bank of India	6.80%-7.30%	6.75%-6.80%	6.50%
Bank of Maharashtra	6.50%-7.15%	6.50%-7.25%	6.50%
Canara Bank	6.85%-7.25%	6.85%	6.80%
Central Bank of India	6.85%-7.45	6.50%-7.0%	6.75%
Indian Bank	6.1%-7.10%	6.70%	6.25%
Indian Overseas Bank	7.10%-7.30%	6.80%	6.50%
Punjab & Sind Bank	6%-7.45%	6.30%-7.25%	6.00%
Punjab National Bank	6.80%-7.25%	6.80%-7%	6.40%-7%
State Bank of India	6.80%-7.25%	7.00%	6.75%
UCO Bank	6.50%-7.05%	6.30%-6.50%	6.20%-6.30%
Union Bank of India	6.6%-7.25%	6.40%-6.60%	6.50%-6.70%