NRIs have three fixed deposit options in India, each with different tax rules and repatriation limits. Picking the wrong one costs you. This guide explains all three, then compares current NRE FD rates at SBI, HDFC, ICICI, and Kotak, checked against each bank's official rate page in October 2026.
FD Options for NRIs
NRIs can open three types of fixed deposits in India. They differ in what money you can deposit, how the interest is taxed, and whether you can freely bring the money back abroad.
NRE Fixed Deposit
An NRE fixed deposit (Non-Resident External) is funded with foreign income converted into Indian rupees. You transfer money from abroad or from your NRE savings account to open one. The interest is exempt from Indian income tax as long as you are a person resident outside India under FEMA (Section 10(4)(ii) of the Income-tax Act, 1961, now Section 11 read with Schedule IV of the Income-tax Act, 2025), so the bank deducts no TDS. Both the principal and interest are freely repatriable to your country of residence at any time.
RBI sets the minimum NRE FD tenure at 1 year, and all four banks compared here accept NRE FDs of up to 10 years. No visit to India is required. Most banks let you book one online or through their app if you already hold an NRE savings account. You can close an NRE FD early, but if it has not completed 1 year, no interest is paid at all. After the first year, the bank pays interest at a reduced rate under its own penalty policy; ICICI and Kotak, for example, list a 1% penalty for most deposits of one year or more.
One hard limit: NRE FDs are meant for money earned abroad. Rent from a property in India, dividends from Indian investments and other India-sourced income must be credited to an NRO account. You can move NRO funds to an NRE account later only within the USD 1 million per financial year repatriation limit, subject to RBI's conditions.
The tax exemption lasts only while you are a non-resident. When you return to India for employment or otherwise become resident, RBI requires your NRE accounts to be redesignated as resident accounts or moved into an RFC account. Our guide on what happens to your NRE account when you return to India covers the steps.
If you are a US citizen or resident, the IRS taxes your worldwide income, so NRE FD interest belongs on your US return even though India does not tax it. Your Indian accounts may also need to be reported on an FBAR (FinCEN Form 114) and Form 8938. Our guide on how Indian fixed deposits are taxed in the US explains the reporting.
For a broader look at how NRE accounts are structured across more banks, our list of the 10 best NRE accounts in India covers account features in detail.
NRO Fixed Deposit
An NRO fixed deposit (Non-Resident Ordinary) is for income you earn in India, such as rent from an Indian property, dividends, pension, or any other India-sourced income. The key difference from NRE FDs: NRO FD interest is taxable in India, and banks deduct TDS at 30% plus applicable surcharge and cess. If you are a US tax resident, Article 11 of the India-US DTAA (Double Taxation Avoidance Agreement) caps Indian tax on this interest at 15%. To get the lower rate, give your bank a Tax Residency Certificate (the IRS issues this as Form 6166) and the Form 41 self-declaration, which replaced Form 10F under the Income-tax Act, 2025.
Repatriation from an NRO account is allowed but capped at USD 1 million per financial year (April to March), subject to RBI's conditions. Understanding TDS on NRO income before you open one saves you from surprises later.
FCNR Fixed Deposit
An FCNR fixed deposit (Foreign Currency Non-Resident) is held in foreign currency, including USD, GBP, EUR, and AUD. You deposit in foreign currency and withdraw in foreign currency. Like NRE FDs, the interest is tax-free in India and the deposit is fully repatriable.
The main advantage over NRE FDs is that FCNR deposits eliminate rupee depreciation risk. If the rupee falls 5% against the dollar during your 3-year NRE FD tenure, you lose that 5% when you convert back. With an FCNR FD, you never leave the dollar. The trade-off is that FCNR rates tend to be lower than NRE FD rates since they track international benchmarks rather than Indian domestic rates. FCNR deposits are available for tenures of 1 to 5 years only.
For a side-by-side breakdown of all three account types, read our NRE vs NRO vs FCNR guide.
| Tenure | SBI | HDFC Bank | ICICI Bank | Kotak Bank |
|---|---|---|---|---|
| 1 to 2 years | 6.25% (444 days: 6.45%) | 6.25% to 6.45% | 6.25% to 6.30% | 6.35% to 6.55% |
| 2 to 3 years | 6.40% | 6.45% | 6.45% | 6.65% |
| 3 to 5 years | 6.30% | 6.40% to 6.50% | 6.50% | 6.40% |
| 5 to 10 years | 6.05% | 6.15% | 6.50% | 6.25% |
| Rates effective from | 15 Aug 2026 | 19 Aug 2026 | 5 Oct 2026 | 23 Sep 2026 |
| Bank type | Public sector | Private | Private | Private |
Rates are for NRE FDs below Rs 3 crore with premature withdrawal allowed, taken from each bank's official rate page in October 2026. Each bank uses its own tenure buckets, so a range shows the lowest and highest rate inside that bucket. Rates change often, so confirm the live rate with your bank before booking.
NRE FD Rates by Bank
SBI NRE FD Rates
SBI's NRE term deposit rates for deposits below Rs 3 crore, effective 15 August 2026, are 6.25% for 1 year to less than 2 years, 6.40% for 2 to less than 3 years, 6.30% for 3 to less than 5 years, and 6.05% for 5 to 10 years. Its 444-day Amrit Vrishti deposit pays 6.45%, which is more than HDFC, ICICI or Kotak currently pay for a deposit of that length. Check the SBI NRE FD rate page for the latest card.
HDFC Bank NRE FD Rates
HDFC uses one rate card for domestic, NRO and NRE deposits, with a 1-year minimum for NRE. For deposits below Rs 3 crore, effective 19 August 2026, it pays 6.25% for 1 year to less than 15 months, 6.35% for 15 to less than 18 months, 6.45% from 18 months to 3 years, 6.50% for 3 years 1 day to less than 4 years 7 months, 6.40% from 4 years 7 months to 5 years, and 6.15% for 5 years 1 day to 10 years. See HDFC Bank FD interest rates.
ICICI Bank NRE FD Rates
ICICI's NRI fixed deposit rates for deposits below Rs 3 crore with premature withdrawal, effective 5 October 2026, are 6.25% for 1 year to less than 18 months, 6.30% for 18 months to 2 years, 6.45% for 2 years 1 day to 3 years, and 6.50% for 3 years 1 day to 10 years. ICICI also lists slightly higher rates, up to 6.55%, for deposits without a premature withdrawal option. RBI requires individual NRE deposits of Rs 1 crore or less to allow premature withdrawal, so that option only applies to larger deposits. See ICICI Bank NRI FD rates.
Kotak Mahindra Bank NRE FD Rates
Kotak's rates for domestic, NRO and NRE deposits below Rs 3 crore, effective 23 September 2026, are 6.35% for 365 days to less than 15 months, 6.45% for 15 to less than 18 months, 6.55% for 18 months to less than 2 years, 6.65% for 2 to less than 3 years, 6.40% for 3 to less than 5 years, and 6.25% for 5 to 10 years. See Kotak interest rates.
Which Bank Pays the Most?
On these rates, Kotak pays the most for 1 to 3 years, peaking at 6.65% for 2 to 3 years. HDFC and ICICI both reach 6.50% for 3 to 5 years, and ICICI leads for 5 to 10 years at 6.50%. SBI is the lowest in most tenures, except for its 444-day deposit. The gap between the highest and lowest rate for the same tenure is up to 0.45% (ICICI versus SBI for 5 to 10 years), so compare the exact tenure you plan to book.
Conclusion
For NRIs deciding where to put their money, the type of FD matters as much as the rate. NRE FDs suit foreign income with tax-free returns and full repatriation. NRO FDs handle India-sourced income. FCNR FDs eliminate currency risk for long-term investors. Among NRE FDs, as of early October 2026, Kotak leads for 1 to 3 years, HDFC and ICICI lead for 3 to 5 years, ICICI leads for 5 to 10 years, and SBI's 444-day deposit is the strongest pick for that specific tenure. Always confirm rates before booking. If you are US-based, speak with an InvestMates advisor before committing a large sum.