NRI Interest Rates: NRE Rates

by Manshu on April 6, 2010

in Fixed Deposits

Update: After the rule changes in December 2011 – banks can set much higher rates for NRE deposits, and I’ve created a new post with the best NRE fixed deposit rates.

I got a comment about compiling a table for interest rates for NRIs. I thought I’d start off with NRE FD rates first, and then move on to other rates. So, here is a table with NRE FD rates as on 1st April 2010.

After compiling these results I noticed that almost all the banks offer the same interest rate. I suspect that the banks that show a different interest rate in the table below also offer the same interest rate as others, but have either not updated their pages, or I haven’t been able to find the correct interest rate. I will try and update this frequently, but for now keep in mind that these NRE Interest Rates were compiled on April 2010.

S.No. Bank Tenure

Interest Rate

1 Karur Vysya Bank 1 year to 2 years

10.00%

2 City Union Bank 1 year and less than 3 years

10.00%

3 Tamil Nadu Mercantile Bank 1 year – less than 2 years

10.00%

4 Karnataka Bank 1 year to less than 2 years

9.75%

5 Dena Bank  1 year only

9.60%

6 State Bank of Travancore 1 year to less than 2 years

9.50%

7 South Indian Bank 1 year to 2 years

9.50%

8 Corporation Bank 1 year to less than 2 years

9.50%

9 IDBI Bank 1 year 1 day – 10 years

9.50%

10 J&K Bank 2 years to less than 5 years

9.50%

11 Federal Bank  1 year only

9.50%

12 Indian Bank 1 year to less than 3 years

9.50%

13 Andhra Bank 1 year

9.40%

14 Central Bank of India 1 year to less than 2 years

9.25%

15 Vijaya Bank 1 year to less than 2 years

9.25%

16 Bank of Baroda 1 year to less than 2 years

9.25%

17 ICICI Bank 390 / 590 / 990 days

9.25%

18 HDFC Bank 1 year 16 days

9.25%

19 SBI
1 year – 10 years

9.25%

{ 30 comments… read them below or add one }

krishna April 28, 2010 at 10:18 AM

thanks this info was very usefull

ramesh

Reply

Manshu April 28, 2010 at 2:39 PM

You are welcome. Let me know if there is any other info you need, and I will see what I can do.

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Aravind May 3, 2010 at 8:54 PM

What is RDA intetest rate right now? Can an NRI buy RDA’s

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Manshu May 4, 2010 at 3:15 PM

By RDA, do you mean Recurring Deposit Account?

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smita August 31, 2010 at 7:21 AM

do you by any chance have data on historical rates from 1996 onwards??

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Manshu August 31, 2010 at 3:32 PM

No, not really.

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Shaanto December 30, 2010 at 2:23 AM

Hi Manshu & everyone else
Please look at the two ‘ ** ‘ bullets below. My question is below that. If you can share your thoughts on it, I’d be much obliged.

** 1 year rates on both Citibank n HDFC for NRE deposits are 2.54 % (compounded quarterly to get 2.56%, Dec 2010)
Copying-n-Pasting from HDFC website:
– Repatriate your complete deposit (principal and interest) at any time.
– Enjoy tax exemption from the entire deposit (principal and interest)

** I have an NRE Savings account at both banks. So copy n paste from HDFC again:
– Pay ZERO tax on the interest earned on your NRE Account in India
– Effective from 1st April and as per RBI mandate, Savings Bank interest will be calculated on the daily balances maintained in your account, at a rate of interest as specified by RBI from time to time (existing rate is 3.5% p.a.). The Savings Bank interest will be paid at half yearly intervals on 30th September & 31st March each year.
My question:
To summarize, my understanding is this:
If I just left my money in my Savings Account and did absolutely NOTHING, I would be earning more interest than if I were to lock it in a FD.
Sounds weird, Is my understanding correct? What would be the point of the FD then?

Reply

Manshu December 30, 2010 at 3:41 AM

Hi Shaanto,

NRIs don’t have the option to invest in a resident savings account, so that’s why you see the interest rate for NRI specific accounts lower than the interest rates for savings account for resident Indians. The right comparison would be the fixed deposit options available for resident Indians which are in the 8% range for a year.

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Shaanto December 30, 2010 at 3:59 AM

Hi Manshu
Thanks for taking time out to reply to me.
Just to clarify, I wasnt referring to a resident savings account.
NRIs can hold a NRE Savings account, yes? The interest rate on this NRE savings account is 3.5%. And the NRE Fixed Deposit rate for 1 year shows 2.59 %. I was comparing between a NRE Savings Account and a NRE FD for 1 or even 2 years.

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Manshu December 30, 2010 at 4:36 AM

I apologize Shaanto – I didn’t read your comment carefully enough and completely misunderstood it. I’m sorry about it.

Yeah, your observation is correct – it’s weird, but consistent, I checked ICICI, Kotak and BoB, but all of them show the same info. Looks like when RBI mandated that all savings account pay 3.5% this one got hiked too, and that’s the cause, but frankly, I hadn’t even noticed it before you brought it up.

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Shaanto December 30, 2010 at 5:53 AM

Hi Manshu
Ah ok, I just wanted to check with another person as well if my understanding about it was correct. I asked a few friends and they too were perplexed. I thought I may have missed something obvious.
The fact that the FD rates are lower than NRE savings account rates make it unattractive at this time. I wonder why the banks are doing it. For sure they are doing it deliberately. Maybe they wanna promote some other financial instrument. Or maybe they are busy providing better rates to resident indians. 😉
Well, back to learning about debt funds for me !!!
Thanks for your time. Helped to have another person’s opinion over the matter.
Here’s to a great 2011. Happy New Year.
Shaanto

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Manshu December 30, 2010 at 6:42 AM

Thanks for your wishes Shaanto, and a very happy new year to you and your family as well!

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Rangan March 24, 2011 at 5:38 AM

Hello Manshu
I am working in the Gulf and just started my SAVINGS for the future. I would like to take your guidance on this.
Am planning to save around Rs 25,000 monthly in a Recurring Deposit (RD) Scheme in Indian Overseas Bank. I am totally new to this and this is my first savings plan. I understand that they offer 8.75% rates for “2 Years” plan. I normally transfer money from here to my SBI NRI Accnt. And my wife who is residing in India, would deposit that money (25K) in the IOB for this RD. After 2 years, we get an interest of Rs 57,431/- apart from the principal of 6lacks. Is this a worthy investment? Or are there any other better investment plans (safer ones)? The bank offered us some plans on Gold too… Kindly offer your guidance on this…

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Manshu March 24, 2011 at 4:40 PM

Rangan – thank you for your question. The 8.75% number looks good. I do know that you can get upwards of 9% on a NRO FD of about 2 years these days, but then there is TDS on FDs whereas I don’t think there is any TDS on RDs. So, you could think about that option as well. Instead of making a monthly payment, make a FD every couple of months or something.

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Renji Varghese June 4, 2011 at 9:43 PM

Sir,
If I am deposit 1 lakh rupees in my SBI savings bank account, how many rupees I get in one month as interest.

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Manshu June 6, 2011 at 3:53 PM

Savings bank account give you 4% per annum these days, so they will credit that amount to your bank account. However, they don’t credit interest monthly as far as I know.

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Shreyas August 13, 2011 at 1:35 AM

Sir,

I am working in Middle east. I want to get 50 thousand rupees per month after 5 years in india on my cash deposits. could you please advice me how can I plan my cash investments from now.

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Sam October 26, 2011 at 4:27 PM

Shreyas, even my query/concern is same as yours.
What is the best way to invest (safe ones) as on today’s date to get 50k after 5 yrs.?

Pls do let me know what did u decide finally by email to me at ghot200 @ gmail. com, so that we can share our thoughts more on this.
Thanking Manshu and all who can forward their best replies on this to us please by email.
Warm Regards,

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Umesh September 6, 2011 at 8:48 PM

Hi Manshu

I hope that the readers of wood-sculpture will find following links useful

NRI Fixed Deposits

Non-Resident Indian Fixed Deposit Account
Get latest interest rates for NRO, FCNR and NRE Accounts.

http://ratekhoj.com/fixed-deposits/nri-fixed-deposits/index.php

Umesh

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siva November 10, 2011 at 3:20 AM

Hi Manshu,

I really appreciate the forum, i got a question i am living in overseas and planning to stay 2 yrs in India and i want to bring 1crore Rs when i am coming and putting for interest, i have to survive these 2yrs with interest money only.So what is the best way to deposit with good interest terms and not paying tax like i got couple of options suggest if u got one.
May be deposit in my parents account(senior citizens)
Split amount into 5 branches

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Manshu November 10, 2011 at 8:15 AM

I don’t know of any way of not paying tax.

If you earn income – you will be liable to pay tax and should pay it.

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Niranjan December 13, 2011 at 1:34 AM

After going through the above discussions on NRI, NRE account and resident Indian accounts, just wondering, will that be wrong for a NRI to transfer money to his resident Indian account which was opened even before he became a NRI?. Many thanks to let me know.

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Manshu December 13, 2011 at 2:00 AM

Yes, NRIs are not supposed to have resident accounts once their status is changed.

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Muralidharan Paramel January 13, 2012 at 9:38 AM

Recently, RBI has removed restrictions on NRI deposits rates and Banks are free to fix rates. Therefore, this table is no more authentic and needs to be updated.

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Manshu January 14, 2012 at 9:52 PM

Thanks for your comment. I’ve updated the table in this post and have a new post with the rates here:

/2012/01/06/best-bank-nre-interest-rates/

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khalid September 4, 2012 at 9:57 AM

Sir,
If I am deposit 5 lakh rupees in my SBI savings bank account, how many rupees I get in one monthly intrest.

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Augustine D'Lima September 25, 2012 at 11:57 AM

NRI FD Rates
Please provide me NRE FD interest rate for one year period as on 6/11/2010 of Axis Bank

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Augustine D'Lima September 27, 2012 at 8:16 PM

please let me the prevailing interest rate on NRE FD as on 6/11/2010 of Axis Bank

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Tom Varkey November 5, 2012 at 12:31 PM

Please let me know how I can earn a monthly income from deposits as a kind of “pension”. Which bank offer such a facility? I will be retiring in two years and would like to investment my benefits for a regular income.

Reply

Morris June 2, 2016 at 7:30 AM

Everyone loves what you guys are usually up too.
Such clever work and reporting! Keep up the very good works guys I’ve included you guys to
my own blogroll.

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