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 2026 NRE FD rates across SBI, HDFC, ICICI, and Kotak in one table.
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 completely exempt from Indian income tax under Section 10(4) of the Income Tax Act, and no TDS is deducted by the bank. Both the principal and interest are freely repatriable to your country of residence at any time.
You can open an NRE FD for a minimum of 1 year and 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. Premature withdrawal is allowed but attracts an interest penalty, typically 0.50% to 1.00%.
One hard limit: NRE FDs cannot be funded with Indian-sourced income. If you earn rent from a property in India or receive dividends from Indian investments, that money cannot go into an NRE account. It must go into an NRO account instead.
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 at 30% TDS. If you hold a US passport, green card, or qualify as a US tax resident, you can reduce this TDS rate to 15% by obtaining a Tax Residency Certificate (TRC) from the IRS and submitting it to your Indian bank under the US-India DTAA (Double Taxation Avoidance Agreement).
Repatriation from an NRO account is allowed but capped at USD 1 million per financial year, after applicable taxes. 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.
| Parameter | SBI | HDFC Bank | ICICI Bank | Kotak Bank |
|---|---|---|---|---|
| 1 year | 6.80% | 6.60% | 6.70% | 7.10% |
| 1 to 2 years | 7.00% | 6.60% to 7.10% | 6.70% to 7.00% | 7.25% |
| 2 to 3 years | 7.10% | 7.15% | 7.00% to 7.10% | 7.10% |
| 3 to 5 years | 6.75% | 7.00% to 7.20% | 7.00% | 7.00% |
| 5 to 10 years | 6.50% | 7.00% | 6.90% | 6.20% |
| Minimum deposit | Rs. 1,000 | Rs. 10,000+ | Rs. 25,000 | Rs. 50,000 |
| Partial withdrawal | No | Yes | No | No |
| Loan against FD | Up to 90% | Up to 90% | Up to 90% (max Rs. 500L) | Up to 90% |
| Interest payment | Quarterly | Quarterly | Quarterly | Quarterly |
| NRI mobile app | SBI YONO | HDFC NRI Portal | ICICI iMobile | Kotak NRI App |
| Bank type | Public sector | Private | Private | Private |
Please note, that the rates are subjected to change frequently, Please confirm it with the bank before investing.
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, Kotak leads for 1-2 years, HDFC is strongest from 15 months to 5+ years, and SBI offers the lowest entry point. Always confirm rates before booking. If you are US-based, speak with an InvestMates advisor before committing a large sum.