Non-Resident External or NRE Account can be a Savings, Recurring or Fixed Deposit Account where NRIs can deposit their foreign currencies which are remitted to an Indian Account. An NRE account is held in Indian Rupees and is completely tax-free in India. In this article, we will discuss how you can select the most suitable NRE fixed deposit and will also give you the best NRE FD rates by different banks in India.
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6.5%INTEREST ON FD
NRIs cannot open a regular account that is designed for Indian Residents as per the guidelines by Foreign Exchange Management Act (FEMA) and this can attract huge penalties if breached. Also, no interest is earned if the account is closed within a year.
An NRE Fixed Deposit Account holder has the following benefits –
*DICGC – Deposit Insurance and Credit Guarantee Corporation
Below is a table that compares NRE Account FD Rates across all the banks for 1 – 5 years :
| Name of the Bank | Tenure | |||
| 1 year | 2 years | 3 years | 5 years | |
| SBI | 5.10% | 5.20% | 5.45% | 5.50% |
| Yes Bank | 5.75% | 6.00% | 6.25% | 6.25% |
| HDFC Bank | 5.00% | 5.00% | 5.20% | 5.45% |
| ICICI Bank | 5.00% | 5.00% | 5.20% | 5.45% |
| PNB | 5.00% | 5.00% | 5.10% | 5.25% |
| Axis Bank | 5.10% | 5.40% | 5.40% | 5.75% |
| Canara Bank | 5.00% | 5.10% | 5.25% | 5.25% |
| Kotak Mahindra Bank | 5.10% | 5.20% | 5.40% | 5.50% |
| Bank of Baroda | 4.90% | 5.00% | 5.10% | 5.25% |
| Bank of India | 5.00% | 5.05% | 5.05% | 5.05% |
| IDBI Bank | 5.05% | 5.15% | 5.40% | 5.50% |
| Indusind Bank | 6.00% | 6.50% | 6.50% | 6.50% |
| Central Bank of India | 5.00% | 5.10% | 5.10% | 5.15% |
| Citibank | 2.75% | 3.00% | 3.50% | 3.50% |
| Indian Overseas Bank (iob) | 5.20% | 5.25% | 5.25% | 5.25% |
| Oriental Bank of Commerce (obc)* | 5.00% | 5.00% | 5.10% | 5.25% |
| DBS Bank | 4.50% | 3.35% | 4.35% | 4.35% |
Interest rates updated on 22th feb 2022. (Applicable to deposits of less than Rs 2 crore)
* Oriental Bank of Commerce and United Bank of India have been merged with Punjab National Bank, effectively from 1st April 2020. Therefore, updated rates will mirror with PNB NRE FD Rates.
FDs of up to ₹5 lakhs insured by RBI
No hassle of opening a saving account
No documentation
Our government has licensed some companies to operate as financial institutions, small finance banks for example. Though not a scheduled commercial bank, these institutes are very niche in operations Fixed deposit is one of the services offered by Small Finance Banks. Down below are some small finance banks that provide the best interest rates for an NRE FD Account.
| Small Finance Bank | Tenure/ FD Interest Rates | |||
| 1 year | 2 years | 3 years | 5 years | |
| AU Small Finance Bank | 5.00% | 6.10% | 6.35% | 6.10% |
| ESAF Small Finance Bank | 6.50% | 6.25% | 5.75% | 5.25% |
| Equitas Small Finance Bank Limited | 6.00% | 6.25% | 6.35% | 5.25% |
| Ujjivan Small Finance Bank | 6.50% | 6.25% | 6.50% | 6.25% |
Interest rates updated on 22th feb 2022
Who Should I Invest in NRE Fixed Deposit?
We see that it is very tough to choose from, especially when each is better on its own. But there are certain factors you must keep in mind while going forward such as interest rate and a trustworthy long-term relationship with the bank. Also, you must check if the account can be operated from the country you live in right now. Some major banks have branches in countries like the USA, UK, and the Middle East.
Suggested Read: NRE vs NRO vs FCNR
44 Comments
Will the insurance cover the FCNR deposits too ? By DICGC.
Hi Sanjay,
Balance in FCNR Account is not covered by DICGC.
Hi … you have mentioned only 3 small finance banks… as well as i checked with other small finance banks who dont have option of NR FD .. are the above one you have mentioned surely have NR FD ?
Hi Rishiraj,
There are 4 small finance banks in India that offer NRE fixed deposits, viz. Equitas, Ujjivan, ESAF and AU (Small Finance Bank). FD Rates for these are updated in the table.
Thanks.
Is Yes bank is a safer option for NRE savings account and RD
Hi Jestin,
Yes. Deposits in Yes Bank are safe. Both the existing deposits as well as new customers can be assured of their deposits in Yes Bank. This has come straight from the Governor of the Reserve Bank of India. The investors of Yes Bank (RBI and SBI along with some private banks) are confident of Yes Bank’s quo status.
The bank enjoys a “Stable” CRISIL rating, status quo.
However, for new customers, we advise that you do not make big deposits (i.e. crossing Rs. 5 lakh) to stay within the DICGC limit of Rs. 5 lakh.
Hi,
I would like to know whether it is safe to put my money in FD of DCB bank
Please advice
Hi Nathan,
Yes. It is safe to put your money in a fixed deposit in DCB Bank. Although it is a private bank, it is still regulated by RBI.
Also, all types of deposits made in a scheduled bank are covered for up to Rs. 5 lakh by the DICGC. This means that even if the bank goes insolvent, you will receive a compensation of Rs. 5 lakh by DICGC which is again regulated by RBI.
It is suggested that you make a deposit of less than Rs. 5 lakh (around Rs. 4 to Rs. 4.5 lakh) so that the interest earned by you in also covered in the deposit insurance.
Click here to know more about the deposit insurance.
Which one is better going for FCNR or NRE FD. Which one is better in terms of return and safe for long. Can FCNR account be used for more than 3 yrs period.
In most cases, FCNR is better for NRIs. While NRE comes with forex risk, FCNR is free of it. Interest rates are better in NRE but if the rupee depreciates at the time of maturity, you will have to suffer its impact on your returns. In FCNR, returns rarely go beyond 1.5% but there is no forex-related risk involved, i.e. maturity amount is credited in the same currency as at the time of depositing. This negates any loss of value due to foreign exchange. And yes, FCNR time deposits can be made from 1 to 5 years.
Click to read more on FCNR deposits.