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.
Card limit is 90% of FD Amount
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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
Hi, why have to left out standard chartered bank? It pays 6.3% on NRE FDs.
Thanks for informing, Sir. We have incorporated Standard Chartered now.
Dear Sir,
i am working in UAE and having NRI account in Indusind Bank. i want to know that can i make fixed deposit in this bank? is it safe for me . or i have to chose only State Bank of India. please suggest
IndusInd Bank currently has a credit rating of A++ which is considered to be stable. This rating is given by CRISIL. Your money stands safe. even if the bank goes into liquidation, your total deposits of up to Rs 5 lakh will be covered under the DICGC deposit insurance. For better safety and satisfaction, you can diversify your portfolio by opening FDs in different banks. Before selecting a bank, always check it’s credit rating. Also, keeping banks like SBI will give you better hold of your hard-earned money.Therefore, keep it diverse.
Hi, please advise SBI NRE Fixed deposit Is it safe ? .
Yes. SBI is a safe commercial Indian bank. Your deposits in SBI NRI fixed deposit will remain safe.
Hi, is IDBI Bank safe for NRE fixed deposits….
Should I continue to invest in IDBI Bank fixed deposits or change my bank ?
Please advise….
Hi K,
IDBI is a scheduled commercial bank of India which is fully regulated by the Reserve Bank of India. Also, deposits of up to Rs 5 lakh are covered under the deposit insurance of DICGC. This comes into the picture if the bank goes into liquidation. For better safety, you can spread your FD amount in different banks to get the maximum deposit coverage. (DICGC covers up to Rs 5 lakh of deposits per bank). Read more about DICGC.
Hi, Hope national bank deposits like SBI, Canara bank NRE FDs are safe, if anything happens customer will get full amount, please confirm?
Bank deposits are insured by the DICGC, which is a wholly-owned subsidiary of the Reserve Bank of India. Deposits are covered for up to Rs 5 lakh per individual per bank. Should a bank goes into liquidation, DICGC comes into the picture. Read more about bank deposit insurance here..