These banks offer 7% interest on NRO deposits Small finance banks and smaller private banks offer the best interest rates for non-resident deposits
March 19, 2022 / 01:16 PM IST
Non-Resident Indians (NRIs) maintain Non-Resident Ordinary (NRO) bank accounts. It is an account for an NRI to manage her 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.
The surplus funds in the NRO savings account should get invested in NRO fixed deposits. The interest earned on NRO deposits is higher compared to regular FDs. Here are the banks offering the best interest rates on NRO deposits with tenures of 2-3 years, as per data compiled by BankBazaar.
Suryoday Small Finance Bank offers an interest of 7 percent per annum on 2-3 year FDs. Among small finance banks, this bank offers the highest rate. A sum of Rs 1 lakh invested will grow to Rs 1.15 lakh in two years.
Ujjivan Small Finance Bank offers 6.90 percent interest per annum on 2-3 year FDs. A sum of Rs 1 lakh invested will grow to Rs 1.15 lakh in two years. The minimum investment required is Rs 5,000.
AU Small Finance Bank offers an interest rate of 6.75 percent per annum for 2-3 year FDs. A sum of Rs 1 lakh invested will grow to Rs 1.14 lakh in two years.
IndusInd Bank, RBL Bank and Equitas Small Finance Bank offer 6.5 percent interest per annum on 2-3 year FDs. A sum of Rs 1 lakh invested will grow to Rs 1.14 lakh in two years.
Fixed deposits with tenures of 2-3 years from Bandhan Bank, DCB Bank and Yes Bank will fetch an interest rate of 6.25 percent per annum. A sum of Rs 1 lakh invested will grow to Rs 1.13 lakh over two years. In the case of Bandhan Bank and Yes Bank, the minimum investment required would be Rs 1,000 and Rs 10,000 respectively.
Small finance banks and smaller private banks are offering higher interest rates to garner newer deposits. The Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, guarantees investments in fixed deposits of up to Rs 5 lakh. The data on FDs is as of March 9, 2022, as given on respective websites. Interest rates on NRO deposits of up to Rs 2 crore for 2-3 year tenures for all listed (BSE) private banks have been considered for data compilation. Banks for which verifiable data is not available have not been considered. For all FDs, 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.