What are the Best FD Rates for NRIs in India?
Disclaimer: This article is for general information/education and is not investment advice. The information is shared in good faith and for general informational purposes only. Ujjivan SFB does not make any representations or warranties regarding the accuracy, completeness, or reliability of the content.
August 31, 2026
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Choosing an FD for NRIs could be slightly more complex compared to choosing a regular FD. How much funds can be repatriated? Which country's tax rules apply? What happens if both countries tax the income? There are many such factors to consider.
After answering these questions, you would naturally want to find the best FD interest rate for your needs. The advertised interest rate is one factor you can consider, but there are several other things to look at beyond that rate before choosing an FD.
This blog will guide you on how you can choose an FD with a competitive interest rate while considering the other factors that can affect your returns.
What FDs Are Available for NRIs?
FDs for NRIs mainly include NRE, NRO and FCNR(B) deposits. Each type is designed for different sources of funds and currency requirements.
1. NRO FDs for NRIs
If you want to invest income earned in India, you can consider an NRO (Non-Resident Ordinary) FD. The interest earned on the deposit can be repatriated after paying the applicable taxes. The principal is subject to the applicable repatriation limit and other FEMA and RBI rules.
2. NRE FDs for NRIs
If you want to invest income earned outside India in Indian rupees, you can consider an NRE (Non-Resident External) FD. The principal and interest earned on the deposit are generally repatriable without a limit, subject to applicable rules. Interest earned on an NRE FD is generally exempt from tax in India.
3. FCNR(B) Deposit for NRIs
If you want to invest your overseas income without converting it into Indian rupees, you can consider an (Foreign Currency Non-Resident Bank) deposit. These deposits are held in permitted foreign currencies, and the principal and interest earned are generally repatriable. Interest earned on an FCNR(B) FD is generally exempt from tax in India. FCNR(B) deposits are available for a tenure of one to five years.
Check the latest Ujjivan NRI FD Rates here. We offer one of the most competitive rates in the market. Maximise your earnings in India.
What May Affect FD Interest Rates for NRIs?
The interest rate on an NRI FD can vary based on several factors. The deposit tenure, type of deposit, currency, and special rates offered by the bank can all affect the rate you receive.
1. Choosing a Deposit Tenure That Offers Higher FD Interest
Different FD tenures can have different interest rates. A longer tenure does not necessarily mean a higher interest rate. Compare the interest rates for different tenures and consider when you may need the funds. If you can keep your money invested until the tenure that offers the highest interest rate, you can choose that tenure to get a better FD return.
2. Choosing Between NRE, NRO and FCNR(B) FDs
NRE and NRO FDs may offer similar interest rates, depending on the bank. FCNR(B) deposits can have different interest rates because they are held in foreign currencies, and the rate can vary based on the currency and tenure.
3. Special FD Rates
Banks may offer special interest rates on certain FD variants, currencies, or tenures. Such offers can give you a better rate than the bank's regular FD rate.
For example, the RBI's swap facility for fresh FCNR(B) deposits is available until August 31st, 2026, for eligible deposits with a tenure of three to five years. Such measures can influence the rates offered by banks on eligible FCNR(B) deposits.
Check the latest rates and offer terms before choosing an FD, as these offers may be available only for a specific period or deposit type.
How Does an FD Calculator Help You Find the Right FD?
For all the above options, wherever you need to compare FD returns based on the deposit amount, tenure and interest rate, an NRI FD calculator can help. It shows you the maturity amount if you stay invested until the full tenure.
This can make it easier to compare different NRI FD options and choose one that matches your requirements.
What Can Reduce Returns on NRI FDs?
The advertised interest rate may not be the only thing that affects the return you finally earn. Some factors can reduce the returns from an NRI FD.
1. Premature Withdrawal
If you withdraw the FD before maturity, the interest applicable to the completed period may be lower than the original rate. The bank may also apply a premature withdrawal penalty, as per its terms.
2. Tax on FD Interest
Interest earned on NRE and FCNR(B) FDs is generally exempt from tax in India, but they may be taxable in your country of residence, subject to the applicable conditions. Interest earned on an NRO FD can be taxable in India under the applicable tax rules. The tax treatment in your country of residence may also need to be considered.
3. Currency Conversion
Currency conversion can affect the value of your returns when you convert an INR deposit back into your home currency. Changes in the exchange rate can increase or reduce the amount you receive.
What is an RFC Deposit for NRIs?
An RFC (Resident Foreign Currency) deposit is designed for eligible NRIs who return to India and become residents. You can hold eligible foreign currency funds in an RFC account without converting them into INR. You may also be able to transfer eligible funds from your NRE or FCNR(B) deposits to an RFC account, subject to applicable rules.
If you return to India before your NRE or FCNR(B) FD matures, the deposit may continue as per the applicable rules, and you may be able to transfer the funds to an RFC account if you want to continue holding them in an eligible foreign currency instead of converting them into INR.
An RFC deposit can be useful if you expect to use the foreign currency for business, expenses or other needs outside India after becoming a resident of India, or if you may move abroad again and become an NRI in the future.
Which NRI FD Should You Choose?
The right NRI FD depends on where your money comes from, the currency you want to hold, and how you plan to use the funds.
Final Thoughts
FDs for NRIs are offered in different currencies, and the interest rates offered also vary. Finding the best interest rate for NRI FDs depends on how well the FD suits your financial needs and the factors you consider before investing. To make the most of your FD, you should also stay invested for the full tenure. If you withdraw it early, the interest rate agreed at the time of booking may not apply.
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