A bank account opened in India in the name of an Non Resident Indians (NRIs) to deposit his/her overseas earnings is known as an Non Resident External (NRE) account. It is helpful for NRIs who earn money abroad and want to convert it to Indian currency denominations.
The majority of NRIs open an NRE account in order to benefit from unlimited money repatriation and its liquidity. Opening an NRE account is an option if you want to send money without any restrictions.
According to the RBI circular, “An NRE rupee account may be opened as a current, savings, or term deposit.” Local payments can be freely made from NRE accounts. Since this account is maintained in Rupees, the depositor is exposed to exchange risk. NRIs / PIOs have the option to credit the current income to their Non-Resident (External) Rupee accounts, provided the authorised dealer is satisfied that the credit represents current income of the non-resident account holders and income-tax thereon has been deducted / provided for.”
NRIs can open current, savings, recurring, and fixed deposits. Here are top banks offering interest rates on NRE fixed deposits.
SBI NRE fixed deposit interest rates
If a deposit is withdrawn from an NRE fixed deposit before one year, no interest is paid. SBI offers an interest rate between 5.30 percent to 5.50 percent for tenure between one year to 10 years for balances below Rs 2 crore.
HDFC Bank NRE fixed deposit interest rates
The minimum tenure for NRE deposits is 1 year. HDFC Bank offers interest rates ranging from 5.35 percent to 5.75 percent for accounts under Rs 2 crore with terms ranging from one to ten years.
ICICI Bank NRE fixed deposit interest rates
No interest will be paid if the deposit is withdrawn before one year tenure. For terms of one to ten years, ICICI Bank offers interest rates ranging from 5.35 percent to 5.75 percent.
Please take note that NRE fixed deposits are not eligible for the additional 0.5 percent p.a. interest rate that is offered on fixed deposits to elderly people.
Yes Bank NRE fixed deposit interest rates
offers interest rates ranging from 6% to 6.50% for terms ranging from one to ten years. According to the Yes Bank website, “No interest is payable if FCNR, NRE FD and RFC FD is withdrawn before the completion of 12 months.” The additional rate of interest payable on fixed deposits to senior citizens does not apply to NRE and NRO Fixed Deposits.”
NRE account advantages
NRE accounts are tax-exempt. Both the balance and the interest accrued in these accounts are tax-exempt. The benefit of an NRE account is that it has high liquidity and enables complete money repatriation to the NRI’s home country when necessary. From an NRE account, you can freely transfer money to a foreign account.