NRE Fixed Deposit Rates 2026: These Banks Offer Tax-Free Returns & Interest Up To 8.06%

Non-Resident External (NRE) deposits are specially designed for Non-Resident Indians (NRIs) who wish to park their overseas earnings in India. These accounts allow NRIs to maintain their foreign income in Indian rupees while enjoying several benefits, including tax-free interest earnings and full repatriation of both principal and interest.

Among the various banking products available to NRIs, NRE fixed deposits (FDs) remain one of the most popular investment options due to their attractive returns, safety, and flexibility.

Here is a list of 10 banks offering some of the highest interest rates on NRE fixed deposits below Rs 3 crore.

DCB Bank

•1 year - 7.10%
•1 to 3 years - 7.10% to 8.06%
•3 to 5 years - 7.40%
•5 to 10 years - 7.25%

IndusInd Bank

•1 year - 7.75%
•1 to 3 years - 7.25% to 7.99%
•3 to 5 years - 7.25%
•5 to 10 years - 7.00%

Federal Bank

•1 year - 7.00%
•1 to 3 years - 7.15% to 7.50%
•3 to 5 years - 7.10% to 7.40%
•5 to 10 years - 6.60%

Canara Bank

•1 year - 6.80%
•1 to 3 years - 6.85% to 7.30%
•3 to 5 years - 7.40%
•5 to 10 years - 6.70%

Punjab National Bank

•1 year - 6.80%
•1 to 3 years - 6.80% to 7.00%
•3 to 5 years - 6.50%
•5 to 10 years - 6.50%

Bank of Baroda

•1 year - 6.80%
•1 to 3 years - 6.75% to 7.10%
•3 to 5 years - 6.75%
•5 to 10 years - 6.45%

State Bank of India

•1 year - 6.80%
•1 to 3 years - 6.80%
•3 to 5 years - 6.50%
•5 to 10 years - 6.25%

Kotak Mahindra Bank

•1 year - 7.10%
•1 to 3 years - 7.10% to 7.40%
•3 to 5 years - 7.00%
•5 to 10 years - 6.20%

Karnataka Bank

•1 year - 7.50%
•1 to 3 years - 6.75%
•3 to 5 years - NA
•5 to 10 years - NA

Union Bank of India

•1 year - 6.80%
•1 to 3 years - 6.40% to 7.30%
•3 to 5 years - 6.50%
•5 to 10 years - 6.50%

Key Features Of NRE Fixed Deposits

•NRIs can deposit their foreign earnings in Indian rupees through NRE fixed deposit accounts.
•Interest earned on NRE fixed deposits is exempt from Indian income tax, and no Tax Deducted at Source (TDS) is applicable.
•If a fixed deposit is withdrawn before completing one year, no interest is paid on the deposit.
•For premature withdrawals after one year, interest is paid for the period the deposit remained with the bank, subject to the bank's terms and conditions.
•Interest on NRE fixed deposits is calculated based on the deposit amount, tenure, and the applicable interest rate.
•Investors can choose from different interest payout options, including cumulative deposits (interest paid at maturity), quarterly payouts, or monthly payouts.
•Monthly interest payout schemes generally offer a slightly lower effective return compared to cumulative deposits.