Deutsche Bank and RBL Bank Lead NRE Fixed Deposit Rates with Up to 8 Percent Interest

Deutsche Bank and RBL Bank Lead NRE Fixed Deposit Rates with Up to 8 Percent Interest

Non-resident external fixed deposits (NRE FDs) are proving to be an attractive investment option for non-resident Indians (NRIs), including expatriates and individuals of Indian origin. These fixed deposits offer numerous benefits such as tax-free interest earnings, the ability to repatriate both principal and interest, and higher interest rates compared to NRE savings accounts.

NRE FDs provide a secure and tax-efficient means for NRIs to manage their funds in India. An NRE savings account is a rupee-denominated account that can include savings, foreign currency non-resident accounts, or fixed deposit accounts. NRIs can deposit overseas earnings or transfer funds from other NRE accounts.

A key distinction between NRE and non-resident ordinary (NRO) accounts lies in their purpose. NRE accounts are tailored for foreign-earned income, while NRO accounts handle income sourced from India such as salaries and rentals. NRE accounts allow for full repatriation of funds, while NRO accounts limit repatriation to $1 million annually. Additionally, NRE accounts offer tax-free status in India, whereas NRO accounts are subject to Indian taxation.

Currently, Deutsche Bank and RBL Bank are leading the market by offering the highest interest rates of up to 8 percent on two-year NRE FDs for deposits of up to Rs 3 crore. As per data compiled by Bankbazaar as of September 25, 2024, a deposit of Rs 1 lakh with either bank would grow to approximately Rs 1.17 lakh at maturity.

Deutsche Bank stands out among foreign lenders with its competitive 8 percent rate, making it the best option for NRIs looking to maximize returns. Similarly, RBL Bank offers this same attractive rate, securing its position as the top choice among private banks.

Financial advisors recommend that NRIs consider investing surplus funds from NRE savings accounts into NRE FDs for enhanced returns and greater financial security.