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Because of their safety and assured returns in turmoil economic situations, fixed deposits are one of the most popular financial instruments in India. Risk-averse Indian investors prefer to invest in fixed deposits. However, not only resident Indians but NRI (Non-residents Indians) can also deposit their earnings in foreign FDs in India. Multiple banks and NBFCs provide NRIs with financial services like NRE accounts, NRO accounts, home loans, personal loans fixed deposits, and a lot more.   

By investing in fixed deposits, NRI can save their money and earn a profit. Here we will discuss the types of NRI FD offered by different banks.  

Common FDs (Fixed Deposits) for non-resident Indians (NRIs):  

• NRE Fixed Deposits
• NRO Fixed Deposits
• FCNR Fixed Deposits
• RFC Deposit

NRE Fixed Deposits

NRE (Non-Resident External) fixed deposits are the same as regular term deposits in India. NRE FDs allow individuals living abroad to keep their money in the bank account as savings or investments to earn high-interest rates offered by lenders. NRE fixed deposits are fully tax-free and transferable. 

NRE FD Rates

Interest rates offered by lenders on NRE deposits for different terms:

Bank	Interest rate per annum
	1 year	After 1 year to 3 years	After 3 years to 5 years	After 5 years to 10 years
SBI	5.10%	5.10%	5.30%	5.40%
PNB	5.50%	5.50%	5.40%	5.40%
ICICI Bank	5.50%	5.55% to 5.75%	5.75%	5.75%
Axis Bank	5.80%	5.70% to 5.80%	5.75%	5.75%
Yes Bank	7.00%	7.00%	7.00%	7.00%
Bank of Baroda	5.10%	5.10%	5.30%	5.30%
Canara Bank	5.50%	5.50%	5.45%	5.45%
Kotak Mahindra Bank	5.00%	4.75% to 5.00%	4.75%	4.50%
Bank of India	5.65%	5.55%	5.55%	5.55%
Union Bank of India	5.75%	5.75%	5.80%	5.80%
Federal Bank	5.80%	6.00% - 6.10%	6.00%	N/A
IndusInd Bank	7.00%	7.00%	6.75%	6.65%
Indian Overseas Bank	5.70%	5.70%	5.70%	5.70%
OBC	5.50%	5.50%	5.40%	5.40%

   *Note: Interest rates are subject to periodic changes 

NRO Fixed Deposits

NRI can invest and manage their income in Indian Banks through NRO (Non-Resident Ordinary) fixed deposit accounts. NRIs who earn income in India from the sources, such as rent, Indian salary, dividends, etc., need to open an NRO deposit. NRO FDs have same interest rates as domestic deposits. An investment in NRO FDs is taxable under the Income Tax Act of India.   

NRO FD Rates

Rates for NRO fixed deposit of less than Rs. 1 crore by top Indian banks. Senior citizens can get benefits of additional interest. 

Bank	Interest rate
	For General Public	For Senior Citizens
SBI	2.90% to 5.40%	3.40% to 6.20%
PNB	3.00% to 5.30%	3.75% to 6.05%
ICICI Bank	2.75% to 5.50%	3.25% to 6.00%
Axis Bank	2.75% to 5.50%	3.50% to 7.25%
Yes Bank	5.00% to 7.00%	N.A
Bank of Baroda	290% to 5.30%	4.50% to 7.30%
Canara Bank	3.00% to 5.30%	3.00% to 5.80%
Kotak Mahindra Bank	2.75% to 4.50%	2.75% to 4.50%
Bank of India	4.00 to 5.90%	4.00 to 5.90%
DBS	3.00% to 5.50%	3.00% to 5.50%
IndusInd Bank	3.00% to 5.50%	3.50% to 6.00%
Indian Overseas Bank	3.50% to 5.45%	4.00% to 5.95%
Dhanalakshmi Bank	3.50% to 5.80%	3.50% to 6.30%

FCNR Fixed Deposits

Non-Resident Indians or people of Indian Origin can invest and maintain a term deposit in foreign currency in Indian banks through FCNRN (Foreign Currency Non-Repatriable) deposits. Interest is offered on the term deposits. Deposits are accepted in the following currencies in FCNR fixed deposit accounts.

• USD (US Dollar)
• Euro
• BP (British Pound)
• AUD (Australian Dollar)
• Japanese Yen
• CAD (Canadian Dollar)
• Singapore Dollar

FCNR FD Rates 

Bank	Rate of return (USD) (1 year to 5 years)
SBI	0.73% - 0.81% (1 year to 3 years)
HDFC Bank	0.01%
Axis Bank	0.15% - 0.95%
ICICI Bank	1.84% - 2.55%

RFC Fixed Deposits

NRIs who have returned to India or who is going to return soon can earn attractive returns on funds they hold in foreign currency by investing in RFC fixed deposits. Banks accept bunds in foreign currencies such as USD, Great Britain Pound, and Euro. The return is fully repatriable. 

RFC FD Rates in

Bank	Rate of return (USD) (1 year to 5 years)
SBI	0.73% - 0.81% (1 year to 3 years)
HDFC Bank	0.01%
Axis Bank	0.15% - 0.95%
ICICI Bank	1.84% - 2.55%

*Note: Interest rates are subject to periodic changes

NRI Fixed Deposit Benefits

NRIs can enjoy the following benefits by investing in fixed deposit offered to them by Indian banks:

• Secure investment and a higher rate of returns.
• Flexible tenure ranging from 7days to 10 years.
• A great way for people living overseas to save and manage income.
• No tax on two FDS (NRE and FCNR).
• Loan and overdraft are available on the FD.

The difference among NRI FDs

Types of FDs/Criteria	NRE	NRO	FCNR	RFC
Currency (Deposit)	Foreign	INR	Foreign	Foreign
Currency (withdrawal)	INR	INR	Foreign	INR
Tax	Not taxable	Interest is subject to tax	Not taxable	Tax can be claimed
Tenure	1 to 10 years	1 to 10 years	1 to 5 years	1 to 10 years
Repatriability	Not fully repatriable	Not fully repatriable	Fully repatriable	Repatriable on bonafide reasons

NRI Fixed Deposit Accounts Eligibility criteria

Following are the documents you will need to provide to invest in NRI FDs:

• Passport
• Visa documents including work permit, permanent resident visa, the resident permit as well the employment visa along with other requested documents.   

Bottom line

India claims the top spot among the world’s receivers of remittances, with the country receiving a staggering $83.1 billion as remittances in 2019. However, a large sum of the remittance is lying in savings accounts, yielding low returns. An NRI fixed deposit offers a great opportunity for investors to manage and expand their income earned abroad. It will help Indians living abroad get higher returns. They can enjoy tax-free returns on certain types of deposits. 

Read More: Top Bank Fixed Deposits Rates in India