Goodreturns.in has selected 5 NRE fixed deposits that offer the highest interest rates across various tenures. Most of these NRE Bank fixed deposits are from private sector banks, which are currently offering better interest rates than PSU banks. NRE Deposits are tax free deposits and the amounts along with principal and interest are freely repatriable. Non Resident Individuals (NRIs) are only permitted to place deposits in NRE Fixed deposits.
The highest interest rate among peers
Lakshmi Vilas Bank is offering an interest rate of 9.75 per cent on a three year NRE fixed deposit. A five year NRE fixed deposit also fetches an interest rate of 9.75 per cent , while a 2 year deposit fetches an interest rate of 9 per cent. This bank is not among the strongest private sector banks around.
Interest earned on NRE deposits are tax free
A 400 day NRE deposit at the South Indian Bank fetches an interest rate of 9.5 per cent, whereas a two year deposit presently has a coupon rate of 9.25 per cent. Interest earned on NRE deposits are tax free.
NRIs are only permitted to place deposits in NRE deposits
A 18-24 month deposit at Development Credit Bank provides an interest rate of 9.50 per cent. The interest rates is slightly reduced to 9.40 per cent on a 13 to 18 month tenure.
A strong South India based bank
A 1-2 year NRE fixed deposit at Karnataka Bank fetches an interest rate of 9.5 per cent. On the other hand the interest is lower at 9.25 per cent on tenures of 2-3 years.
A strong foreign bank
A 5 year fixed deposit at German Bank, Deutsche Bank gives an interest rate of 9.5 per cent. For a 2-3 year deposit the interest rate offered is reduced considerably to 8.25 per cent.