NRE Fixed Deposit rates (November 2020)

With RBI reducing benchmark rates the NRE FD rates have been on a decline though some banks still offer high returns.

NRE Interest is tax free but only guaranteed protected upto a maximum of 5 lac rupees just like any other bank deposits, anything over that is like a unsecured loan to the bank.

So while making a deposit try and spread the risk across different banks if possible. Yes, that means having to manage more than one bank account and if you like the convenience go for a respected and strong bank like SBI though it means lesser return.

BankRateTerm
Indus Ind7%1 to 3 years
IDFC First6%500 days
Standard Chartered5.60%12 months to 21 Months
HDFC5.50%greater than 5 Years
DBS5.50%greater than 4 years
ICICI Bank5.50%greater than 5 Years
SBI5.40%greater than 5 Years
Kotak Mahindra4.90%1 year 1 month to 4 years

When shortlisting a bank, I would not touch a co-operative bank no matter how high a rate they offer, then I would exclude small time private players, then exclude big private players who have grown too fast (remember Yes Bank), then look at Balance sheet and management and even exclude foreign banks like Deutsche and HSBC whose parent entities are struggling. If any foreign bank fails RBI is not going to save it. Lastly look if LIC has a stake in the bank, if yes, then that is a very good indicator of government support and interest (higher chance of bailout if something goes awry).

Click on the Bank Name in the table above and it will take you to the website of the Bank and if you find any other rates that are worth sharing leave a comment and I will add them to the table.

6 thoughts on “NRE Fixed Deposit rates (November 2020)”

    1. Hi Reddy,

      It’s a marketing gimmick. They are basically offering 5.8% compounded quarterly locked for 3 years with a minimum outlay of 55k sgd.

      Liked by 1 person

  1. For me its always a dilemma what tenure of FD to choose, because if I stay in SG it is okay, but if I go back to India I will be taxed 30% on this. For now I chose duration of 2year 4 months, which coincides with Mar 2023. March because it is end of financial year, so it is just nice to transition from NRE to resident, if I move to India the previous year.

    Like

    1. That’s a good way to look at it however you know that only the interest for the given financial year will be taxed, so a better strategy could be to target for 30 Sep so that only half a years interest gets added to taxable income and when the FD matures you can re-invest in 5 year FD where there is some tax benefit or any other suitable investment at that time.

      Liked by 1 person

  2. I finally managed to get my Indusind bank account setup. Their process is a bit slow. Even though I opened the account online and submitted all documents, scanned self attested copies. They opened it with a debit freeze. Then they arranged a courier pick for the documents. So in total it took 2 week for me. I opened only NRE account. There is minimum balance of 10k to be maintained in the savings account. Also there are debit card charges of Rs 250 for issuance and 250 for annual fee. I asked them to cancel the debit card. I will only do NEFT in/out from my ICICI account to this account.

    So this is one of the last banks left that still give 7% interest rate on FD. I guess, this rate will not last long as even Yes bank has now cut its FD rates for some tenures to below 7%.

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    1. That is a rather long processing time, idfc comparatively was a lot quicker, I think less than 3 days a few years back. Good that you managed to open the account and lock the rates.

      Liked by 1 person

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