Having a savings account with a foreign bank can simplify money transactions for Non-Resident Indians (NRIs) and High Networth Individuals (HNIs). Foreign banks in India, with branches across cities, not only provide facilities for international transactions, but also offer credit cards, loan products, remittances, fixed deposits, savings accounts and more.
It’s important to give some serious thought to know how much interest is paid by foreign banks for leaving your funds in the savings account of these banks.
Interest rates are comparable to leading private banks
As per data compiled by BankBazaar foreign banks such as DBS Bank and Deutsche Bank offer 5 per cent and 4 per cent interest on their savings accounts, respectively. Other foreign banks offer interest of up to 3.5 per cent. These interest rates are competitive when compared with what leading private banks offer. For instance, HDFC Bank and ICICI Bank offer 3 per cent to 3.5 per cent interest. Axis Bank pays 3 per cent to 4 per cent interest on its savings accounts.
Minimum balance requirements are higher
The minimum balance requirement in savings account of a foreign bank ranges between Rs 25,000 and Rs 2 lakh. This is kept much higher compared to the requirements of leading private banks in India, because foreign banks want to mainly serve NRIs and HNIs in India with their product offerings and services. At Axis Bank and HDFC Bank minimum balance requirement is Rs 2,500 to Rs 10,000. For ICICI Bank, the minimum balance requirement is Rs 1,000 to Rs 10,000.Choose a foreign bank with a long-term track record in India and overseas locations, good service standards and product offerings, worldwide branch network and ATM services across cities; a higher interest on savings accounts would be a bonus.