Interest rates on NRE Bank Deposits were freed by the government a few years ago, after being largely linked to LIBOR rates.
Today, banks are free to offer interest rates that are tax free, at pretty competitive rates. In fact, NRE deposits, unlike NRO deposits are free from tax. These deposits are meant only for Non Resident India (NRIs) and domestic citizens are not allowed to invest.
These days interest rates on NRE deposits, have fallen largely in line with interest rates in the economy. However, we have done a research to highlight some of the best interest rate on NRE bank deposits in India.
HDFC Bank NRE Deposit Interest Rates
HDFC Bank NRE Deposits offer an interest rate of 9 per cent on 1 Year 1 Day and also for the 1 Year 16 Days tenure. This is an excellent interest rate on NRE deposits. The bank also has a superb network, which makes these deposits backed by service across the many branches of the bank.
Deutsche Bank NRE Deposits
Deutsche Bank in India offers an interest rate of 8.25 per cent on a 5-year deposit, taking the cumulative yield to as much as 10.09 per cent over the same tenure. This is a good interest rate from a foreign bank in India.
The interest rate on other tenures is much lower between 7 to 7.75 per cent.
RBL Bank deposit interest rates
RBL Bank offers an interest rate of 8.5 per cent on its 24-month NRE deposit. On the other tenures the bank is offering a lower interest rate.
This we believe is pretty good considering, where interest rates currently are. The interest rate on the NRO deposits is also the same. However, do remember that there is a tax on NRO deposits, unlike the NRE deposits
Bandhan Bank NRE deposit interest rates
Bandhan Bank offers an interest rate of 8.25 per cent on the 1, 2 and 3 year deposits. Bandhan Bank is the newest bank in the country
The bank offers an interest rate of 8 per cent on a 6 months to less than 1 year deposit. What this means is that the interest rate on the short and the medium term deposits is pretty good.
IDFC Bank offers an interest rate of 8.25 per cent, on a 366 days deposit. Again, like Bandhan Bank this is the newest bank in the country.
One can consider this option, as you can book an FD online.
ICICI Bank NRE deposit Interest rates
ICICI Bank offers an interest rate of 7.50 per cent on NRE Deposit rates. We wish to emphasize that this not the best NRE deposit interest rates around, though investors may benefit from the solid network that the bank has across the globe.
SBI Bank NRE deposit Interest rates
The interest rates from SBI, is nowhere near the best. A 456 day to less than 2 years deposit at the State Bank of India fetches you an interest rate of 7.25, which is the best that it gets at India's largest lender.
We suggest that you look at other banks, which offer a higher interest rate.