NRE FD Rates in India: How to Compare Interest Rates in 2026

An NRE fixed deposit is a rupee-denominated bank deposit available to eligible non-residents. Funds received through permitted channels are converted into Indian rupees and placed in the deposit.

The main features generally include:

• Rupee denomination: The deposit is held in Indian rupees.
• Defined tenure: The money is deposited for an agreed period, subject to the bank’s terms.
• Repatriation: The principal and interest are generally repatriable, subject to applicable regulations.
• Indian tax exemption: Interest is exempt from Indian income tax when the relevant legal conditions are satisfied.
• Interest payout choices: The bank may offer periodic interest payments or payment at maturity.

Under RBI guidance, the minimum tenure for an NRE term deposit is one year. Banks may offer longer tenures according to their policies and applicable rules.

An NRE FD can be useful for eligible NRIs who want to hold savings in Indian rupees while retaining the ability to transfer eligible funds abroad.

Repatriation of principal and interest

The principal and interest from an NRE deposit are generally repatriable under the applicable rules. This can be useful for NRIs who expect to use their funds outside India in the future.

Repatriation remains subject to the relevant regulations and banking procedures, so confirm the documentation and transfer requirements with your bank.

Tax treatment in India

Interest earned on an eligible NRE account is exempt from Indian income tax if the conditions prescribed under the applicable law are met. Eligibility depends on the account holder’s residential status under the relevant rules and other applicable conditions.

This Indian tax treatment does not automatically determine how the interest is taxed in another country. If you live overseas, check the tax rules in your country of residence or seek advice from a qualified tax professional.

Predictable interest terms

An NRE FD generally provides an agreed interest rate for the deposit tenure, subject to its terms and conditions. This can help you estimate the interest payable.

The actual amount received depends on the principal, applicable rate, tenure, payout method and premature withdrawal or renewal conditions.

NRE and Non-Resident Ordinary (NRO) accounts serve different purposes. An NRE account is generally used for eligible foreign earnings brought into India, while an NRO account is commonly used to manage income earned in India, such as rent or pension.

Confirm the applicable rules and bank-specific conditions before opening either type of deposit.

Interest on an eligible NRE account is exempt from Indian income tax when the conditions prescribed by law are satisfied. The exemption is not a blanket rule for every person who holds an account labelled NRE.

Your eligibility depends on the applicable residential-status rules and other legal conditions. If your residential status changes, inform your bank and ask how your account and deposit should be treated.

Also consider the tax rules in your country of residence. A deposit that qualifies for an exemption in India may still need to be reported or taxed overseas.

For a personal tax decision, consult the official Income Tax Department guidance or a qualified tax professional.

Premature withdrawal means closing a fixed deposit before its agreed maturity date. Whether it is permitted, and how much interest you receive, depends on the bank’s terms and applicable rules.

Before booking an NRE FD, check:

• Whether premature withdrawal is allowed for the deposit.
• Whether a minimum holding period applies.
• Whether the bank deducts a penalty or recalculates interest for the completed tenure.
• Whether partial withdrawal is available.
• What happens if the account holder’s residential status changes.

Do not assume that every bank follows identical early-closure terms. Review the conditions applicable to the specific deposit before committing your funds.

An NRE FD and a Bajaj Finance FD are different products.

An NRE FD is a bank deposit opened under the NRE account category. Bajaj Finance offers a company fixed deposit, which has separate eligibility and payment requirements. According to Bajaj Finance’s published FAQ, an NRI FD investment must be funded from an NRO account; funds sent from an NRE account are not accepted for booking the deposit.

Bajaj Finance’s published FD rates are also separate from NRE bank FD rates. As published on its official rate page, rates effective from w.e.f 07 October, 2026 are up to 7.75% p.a. for customers below 60 and up to 8.15% p.a. for senior citizens, for eligible deposit amounts and tenures. The applicable rate depends on the selected tenure and interest payout option.

A company FD is not covered by DICGC deposit insurance. Credit ratings can help assess credit risk, but they are not a guarantee of repayment. Review the product terms and risks before deciding whether it suits your circumstances.

Choosing an NRE FD involves more than finding the highest advertised rate. Consider when you may need the money, whether you want periodic interest payments and whether you may need to close the deposit early.

Use this practical process:

1. Confirm eligibility: Check that you qualify to open and maintain an NRE account.
2. Compare current rates: Review official bank rate cards for the same tenure and payout option.
3. Check the terms: Read the minimum deposit, premature withdrawal, renewal and other conditions.
4. Review tax and repatriation rules: Confirm the Indian tax exemption requirements and applicable transfer rules.
5. Check deposit protection: Understand the protection applicable to the institution and deposit.
6. Verify before booking: Confirm the final rate and terms directly with the bank.

The most suitable deposit depends on your circumstances, not only on its advertised rate.

NRE fixed deposits can help eligible NRIs hold foreign earnings in Indian rupees while earning interest under an agreed deposit arrangement. The principal and interest are generally repatriable, and interest may be exempt from Indian income tax when the prescribed conditions are met.

Rates, payout options and early-withdrawal terms vary by bank. Compare current official rate cards and check the rules that apply to your residential status before booking a deposit. If you are also considering a company FD, assess it separately because its eligibility, tax treatment, repatriation arrangements and deposit protection differ from those of an NRE bank deposit.