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.
| Bank | Rate | Term |
| Indus Ind | 7% | 1 to 3 years |
| IDFC First | 6% | 500 days |
| Standard Chartered | 5.60% | 12 months to 21 Months |
| HDFC | 5.50% | greater than 5 Years |
| DBS | 5.50% | greater than 4 years |
| ICICI Bank | 5.50% | greater than 5 Years |
| SBI | 5.40% | greater than 5 Years |
| Kotak Mahindra | 4.90% | 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.
Aditya Ladia 
Deposit rates starting to inch back up again. Idfc first and Indus ind offering 6.5%
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RBI has recently announced some measures to attract NRE and FCNR deposits. I didnt see many banks increase their rates for NRE FDs, however I noticed both Yes bank and IndusInd are now offering 7% for NRE FDs(not for NRO or domestic) I am considering parking 1cr with IndusInd for 1yr. It seems inflation is going to remain a problem so maybe 1yr down the line we may get better rates?
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I would stay away from Yes and IndusInd just for 0.5% more interest. I think the FD rates should peak at 7.5% in 6 months time and staying with big sound banks is a better choice
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Indusind is pretty safe. Most of the big banks are giving 5.6% only
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IndusInd promoters are Hindujas, it can go Yes bank route. Good if you have done your due diligence
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Yes bank there were already signs of bad practices and we knew atleast 2 years in advance that something is fishy with the bank. RBI didnt allow extension of Rana Kapoor. Also the Covid panic came as a perfect storm for the bank and RBI had to step in. But IndusInd bank is not like that. It is just that when Yes bank came down, people panicked and withdrew money from IndusInd because it is a small bank. Same thing happened with ICICI bank in 2008, there was a bank run on it. Looking at the results of the bank, it looks pretty good. Anyways,I will keep monitoring it and if there are signs of trouble, I can always move my money out.
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Hi Aditya
Any views on DBS India NRE FD”s ?
Offering around 19% yield for 3 years on minimum 30L + FD.
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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.
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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.
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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.
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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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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.
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