One of the most popular in investment options available for customer, Fixed Deposit are highly procured due to their relative safety and reliability in a high risk economic environment. There are numerous reasons as to why fixed deposits are widely procured. Some of these include -
Although fixed deposits come with tax benefits, the interest applicable on that is not tax free. There are fixed deposit schemes that allow customers to withdraw prior to maturity but most don’t. Even if withdrawal prior to maturity is allowed, interest rate applicable is low. If customers withdraw prior to maturity in cases where it is not allowed, a penalty will be applicable.
Interest rates on fixed deposits do not change, even if the market is in a good shape which again is not the best situation for investors.
NRO or Non Resident Ordinary Accounts is meant for NRIs or Non Resident Indians to keep funds that are also existent prior to becoming a Non Resident Indian and also the funds earned by them within the country such as rent, Indian Salary, dividend and so on. Interest earned is taxable under the Income Tax Act of India. This account offers numerous benefits as well.
The interest rate applicable varies from bank to bank. The table below illustrates the rates of some popular banks. Senior citizens receive additional interest.
Last Updated on - 29 Sep 2021
|Name of the Bank||NRO Interest Rates||Senior Citizen NRO Interest Rates|
|Axis Bank||2.75% to 5.50%||3.50% to 7.25%|
|Bank of Baroda||290% to 5.30%||4.50% to 7.30%|
|Bank of India||4.00 to 5.90%||4.00 to 5.90%|
|Bank of Maharashtra||3.00% to 5.00%||3.00% to 5.50%|
|Bharatiya Mahila Bank||5.00% to 7.25%||5.50% to 7.75%|
|Canara Bank||3.00% to 5.30%||3.00% to 5.80%|
|CitiBank||2.75% to 3.90%||N.A|
|DBS Bank||3.00% to 5.50%||3.00% to 5.50%|
|Dena Bank||2.90% to 5.30%||3.40% to 6.30%|
|Deutsche Bank||2.00% to 6.50%||2.00% to 6.50%|
|Dhanalakshmi Bank||3.50% to 5.80%||3.50% to 6.30%|
|HDFC Bank||2.75% to 5.50%||3.25% to 6.25%|
|ICICI Bank||2.75% to 5.50%||3.25% to 6.00%|
|IDBI Bank||3.00% to 5.70%||3.00% to 5.70%|
|Indian Overseas Bank||3.50% to 5.45%||4.00% to 5.95%|
|IndusInd Bank||3.00% to 5.50%||3.50% to 6.00%|
|Jammu and Kashmir Bank||5.00% to 7.35%||N.A|
|Karnataka Bank||3.50% to 5.65%||3.90% to 6.05%|
|Kotak Mahindra Bank||2.75% to 4.50%||2.75% to 4.50%|
|Lakshmi Vilas Bank||3.75% to 6.10%||3.75% to 6.60%|
|Punjab and Sind Bank||3.50% to 5.50%||4.00% to 6.00%|
|Punjab National Bank||3.00% to 5.30%||3.75% to 6.05%|
|Saraswat Bank||3.25% to 5.85%||3.25% to 6.35%|
|South Indian Bank||3.50% to 5.70%||4.00% to 6.20%|
|State Bank of Hyderabad||2.90% to 5.40%||3.40% to 6.20%|
|State Bank of India||2.90% to 5.40%||3.40% to 6.20%|
|State Bank of Mysore||2.90% to 5.40%||3.40% to 6.20%|
|State Bank of Travancore||2.90% to 5.40%||3.40% to 6.20%|
|Tamilnad Mercantile Bank||3.75% to 5.75%||3.75% to 5.75%|
|Yes Bank||5.00% to 7.00%||N.A|
In order to open a Fixed Deposit account, individuals will need to provide the following -
Other documents, if necessary, will be mentioned by the bank authorities.
There are different types of Fixed Deposits available to customers based on the features. One such popular option is NRO Fixed Deposit.
NRO Fixed Deposits are not tax free, in the sense that, although there will not be tax charged on the principal, the interest earned on it will be subject to tax as per the Income Tax Act of 1961. Tax applicable on NRO account is quite high at 30% along with applicable surcharge and cess.
In case the interest earned is over Rs. 10 lakhs, then an additional surcharge of 10% will be added.
The minimum deposit amount required to open an NRO fixed deposit account is Rs.1 lakh.
Yes, you can deposit funds in Indian currency into your NRO fixed deposit account.
Some banks offer the option of premature withdrawal to their customers opening an NRO fixed deposit account.
Yes, under the Income Tax Act of 1961 the interest earned from an NRO fixed deposit account is taxable.
No, banks do not offer repatriation options on the principal amount invested in NRO fixed deposits. However, customers can transfer the interest earned to a foreign account.
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