NRO deposit rates: These banks offer up to 8.51% interest on two-year deposits
Small finance banks lead with the highest interest rates on NRO deposits, followed by small private banks and foreign banks. The leading public sector banks like the State Bank of India, Bank of Baroda, and others are not competitive in interest rates like other banks.
Most banks have raised interest rates on NRO deposits with tenure of two years after six cumulative rate hikes by the Reserve Bank of India (RBI), in the financial year 2023. The cumulative rate hike was 250 basis points (one basis point is one-hundredth of a percentage point). Small finance banks lead with the highest interest rates, followed by small private banks and foreign banks. The public sector banks are not as competitive when it comes to interest rates. According to data compiled by BankBazaar, these banks are offering the best interest rates on NRO deposits.
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Non-Resident Indians (NRIs) maintain Non-Resident Ordinary (NRO) bank accounts. It is an account meant for an NRI to manage their income earned in India, which includes rentals, dividend incomes, salaries etc. An NRI can deposit money in foreign as well as Indian currency and make withdrawals in Indian currency from this account. Surplus funds in the NRO savings account should get invested in NRO fixed deposits. Here are the banks offering interest up to 8.51 percent on NRO deposits with two-year tenure.
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Suryoday Small Finance Bank offers an interest of 8.51 percent per annum on two-year fixed deposits (FDs). Among small finance banks, this one offers the highest interest rate. A sum of Rs 1 lakh invested in this FD will grow to Rs 1.18 lakh in two years.
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Equitas Small Finance Bank offers an interest rate of 8.50 percent per annum on two-year fixed FDs. A sum of Rs 1 lakh invested in this FD will grow to Rs 1.18 lakh in two years.
Among private banks, DCB Bank offers the best interest rates. It offers an interest rate of eight percent per annum on two-year FDs. AU Small Finance Bank also offers an interest rate of eight percent per annum on two-year FDs. A sum of Rs 1 lakh invested in these FDs will grow to Rs 1.17 lakh in two years.
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Deutsche Bank is offering the best interest rates among foreign banks. It offers an interest rate of 7.75 percent per annum on two-year FDs. Other banks, which include IDFC First Bank, RBL Bank and Ujjivan Small Finance Bank are also offering an interest rate of 7.75 percent per annum on two-year FDs. A sum of Rs 1 lakh invested in these FDs will grow to Rs 1.17 lakh in two years.
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DBS Bank, HSBC and Yes Bank offer an interest rate of 7.5 percent per annum on two-year FDs. A sum of Rs 1 lakh invested in these FDs will grow to Rs 1.16 lakh in two years.
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Small finance banks and smaller private banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation, a subsidiary of the central bank, guarantees investments in fixed deposits of up to Rs 5 lakh.
The data on fixed deposits is as of April 26 as mentioned on websites of lenders. Interest rates on NRO deposits of up to Rs 2 crore for 2 to 3 years tenures for all listed (BSE) public, private and foreign banks have been considered for data compilation. Banks for which verifiable data is not available have not been considered. For all fixed deposits, quarterly compounding is assumed.
Hiral Thanawala is a personal finance journalist with 9 years of reporting experience. Based in Mumbai, he covers financial planning, banking and fintech segments from personal finance team for Moneycontrol.
