Interest rates on NRE fixed deposit rates were freed by the government in a move aimed at attracting more foreign currency into India. Interest earned on NRE deposit rates, unlike NRO deposit are tax free. Here are 5 reputed banks that offer the highest interest rates on NRE deposits. We have taken only the private and public sector banks and not the cooperative banks.
Catholic Syrian Bank
The Kerala based Catholic Syrian Bank is offering the highest interest rates among the reputed names in the banking sector. The interest rate for a 12-24 month deposit is 9.65 per cent per annum. Interest earned is tax free.
South Indian Bank
The South Indian Bank is offering an interest rate of 9.60 per cent for a 15 month deposit. The rates on other tenures are lesser then the 15 month tenure.
Tamil Nad Mercantile Bank
The Tamil Nad Mercantile Bank is offering an interest rate on its NRE deposits of 1-2 years at 9.50 per cent. The 3 year to 10 year duration attracts a lesser interest rate of 9.25 per cent.
Punjab and Sind Bank
Among the public sector banks, the NRE deposits of Punjab and Sind Bank attract the highest rate of interest at 9.25 per cent for a 500 day deposit.
Union Bank of India
Union Bank of India is offering an interest rate of 9.25 per cent on a 7 year 7 month deposit for its NRE deposit account. Union Bank of India is a well established public sector bank.