June 5, 2010. DBS Bank is offering the highest interest rate among all banks in India for NRO fixed deposits. DBS is offering an interest rate of 8.75% for deposit amounts below Rs. 15 lakhs for a NRO fixed deposit period of 5 years. For amounts above Rs. 15 lakhs and below Rs. 50 lakhs, DBS offers an interest rate of 8.60% while you can get an interest rate of 8.40% for amounts above Rs. 50 lakhs.

DBS Bank is a bank headquartered in Singapore providing the full range of services in corporate, SME, consumer and wholesale banking activities across Asia and the Middle East. DBS Bank has 10 branches in India.

Among other banks, Tamilnad Mercantile Bank, South Indian Bank, DBS Bank, Bank Of Rajasthan and Catholic Syrian Banks are all offering interest rate of 8.00% for various NRO FD terms.

Visit Ratekhoj.com to compare and get the best NRO fixed deposit rates in India.

November 30, 2009. DBS Bank, a foreign bank headquartered in Singapore with several branches in India, is offering the highest interest rate for NRO fixed deposits.

DBS Bank is offering an interest rate of 8.60% for NRO fixed deposit terms of over 5 years for deposit amounts of Rs. 15 lakhs to Rs. 50 lakhs. For deposit amounts of less than Rs. 15 lakhs, DBS bank is offering an interest rate of 8.50% for terms of over 5 years.

The second highest interest rate of 8.00% for NRO fixed deposits is offered by DBS Bank also. This interest rate is offered for a term of 5 years.

Many other attractive interest rates of over 7.00% are available for NRO fixed deposits. NRIs can get the best interest rates for NRO deposits by visiting Ratekhoj’s NRO fixed deposit comparison section.

There are several options available for NRIs considering opening a account in an Indian bank: Non-Resident Ordinary (NRO) Savings Account, NRO Fixed Deposit Account, Non-Resident External (NRE) Savings Account, NRE Fixed Deposit Account and Foreign Currency Non Resident (FCNR) Fixed Deposit Account.

Each of these account types has certain advantages and disadvantages. Understanding them can help you in making a choice. Factors to consider include:

• Source of the funds in the account: Are the funds to be deposited in these accounts from sources in India or abroad?
• Currency in which the account is maintained and associated currency rate risks if you want to convert back into the foreign currency: Do you intend to repatriate the currency back to your country of residence at some point?
• Repatriability: Can you convert back to the foreign currency?
• Taxation in India on the principal and interest earned: Do you have to pay taxes for the money in India?
• Ability for an Indian resident to operate the account with a mandate: Can a family member in India operate the account with a mandate card issued by the bank?
• Can the account have a Indian resident as a joint account holder? Note that this is different than having a family have the ability to withdraw funds from the account as a mandatee.

Key aspects of NRE accounts are as follows:

• NRE accounts are maintained in rupees. This means that the foreign currency is converted to Indian rupees at the prevailing foreign exchange rates when the money is deposited into the account.
• The primary source of funds deposited into NRE accounts must be from your earnings abroad. In other words, you cannot deposit money from sources in India such as house rent or pensions in this account.
• The principal amount and the interest are fully repatriable (can be converted to any foreign currency). The conversion back to foreign currency is done at the prevailing forex rates.
• Interest income earned on the money in a NRE account is non-taxable in India. However, it may be taxable in your country of residence as per that country’s tax rules.
• You can only have other NRIs as joint account holders on NRE accounts. Resident Indians cannot be joint account holders in NRE accounts with NRIs.

Key aspects of NRO accounts are as follows:

• NRO accounts are maintained in rupees. This means that the foreign currency is converted to Indian rupees at the prevailing foreign exchange rates when the money is deposited into the account.
• The source of funds deposited into NRO accounts can be from India or abroad. NRO accounts are appropriate for NRIs who have had earnings in India earlier and became NRIs later as well as NRIs with income from sources in India such as house rent, pensions etc. You an also deposit money from your earnings abroad or transfer money from a NRE account into a NRO account.
• Current Income like rent, dividend, pension can be remitted abroad through the NRO account. Funds which can be repatriated from the NRO are subject to a maximum limit of USD 1 million per financial year. Repatriability is subject to conditions.
• Interest income earned on the money in a NRO account is liable for taxes in India.
• You can have other NRIs or resident Indians as joint account holders on NRO accounts.

Key aspects of FCNR accounts are as follows:

• FCNR accounts have to be opened and maintained in the foreign currency itself.
• The source of funds deposited into FCNR accounts have to be from sources abroad. They can also be from your other NRE or FCNR accounts.
• The principal amount and the interest are fully repatriable
• Interest income earned on the money in a FCNR account is non-taxable in India. However, it may be taxable in your country of residence as per that country’s tax rules.
• You can only have other NRIs as joint account holders on FCNR accounts. Resident Indians cannot be joint account holders in FCNR accounts with NRIs.

NRE and FCNR accounts have the advantages of not having to pay taxes in India which could be a hassle for NRIs trying to figure out the tax rules in India as well as their country of residence.

People opening NRE accounts and would like to repatriate their funds at some point must consider the foreign currency conversion rates at the time the funds are being deposited versus the time when the funds have to be repatriated. This can carry risks as well as rewards depending on the forex rates trend. For example, if $1000 is converted to Indian rupees at Rs. 50 per dollar and then converted back to dollars at a conversion rate of Rs. 40 per dollar, then you would get back $1250 for a good gain. On the other hand, if the dollar is at Rs. 55 per dollar, you would lose some of your principal when you do the repatriation.

FCNR accounts do not carry any forex rate risk as the accounts are always maintained in the foreign currency.

NRO accounts have the advantage of being able to deposit funds from both sources in India and abroad and having joint account holders in India. Repatriability of funds is a disadvatage for NRO accounts.

The key advantage of NRO fixed deposit accounts is the substantially higher interest rates as compared to FCNR and NRE accounts. Check Ratekhoj for latest NRO fixed deposit interest rates offered by various banks in India. The rate of interest offered is different in different banks and also depends on the fixed deposit tenure. So your choice of which bank to open a account in can depend on the interest rates.

FCNR and NRE fixed deposit accounts typically yield much lower than NRO fixed deposit accounts. Check Ratekhoj for latest FCNR and NRE rates. Most banks in India offer the same interest rate for FCNR and NRE fixed deposit accounts. So if you are planning to choose a bank for your NRE or FCNR fixed deposits, interest rates offered is not a consideration.

Both NRE and NRO savings accounts yield 3.5% currently. There is no savings account option for FCNR accounts.

NRE Savings and NRO Savings accounts allow you to have family members in India as mandate holders whereas you cannot have mandatees for the fixed deposit options available in NRE, NRO and FCNR accounts. Mandate holders can withdraw funds from your accounts in India with some type of a card such as a debit card of a ATM card. They can also withdraw funds at the bank locations. Banks such as Citibank allow you to even specify certain conditions on the amounts of withdrawals allowed per month on the operations of the mandatee.

Most banks also provide for taking loans for a certain percentage of your existing balance on your NRE, NRO and FCNR fixed deposit accounts. Check with the banks for details on loans.

ICICI Bank, one of the major private sector banks in India, has cut its interest rates for NRO Fixed Deposits.

The rate for a 390 day NRO FD has gone down from 8.75% to 8.50% for deposit amounts of less than Rs. 15 lakhs. A NRO FD for a term of 590 days in ICICI now yields 8.50% down form 8.75%. A search of NRO fixed deposit interest rates for similar terms shows that there are several banks with NRO rates more than what ICICI offers. Development Credit Bank and Tamilnad Mercantile Bank give an interest of 10.00% while several banks offer more than 9.00% interest currently.

The term of 890 days has now been discontinued. In its place a new term of 990 days (which is less than 3 years) has been introduced by ICICI with a interest rate of 8.75%. A quick search of NRO FD rates for terms of 2-3 years shows that you can get better interest rates in several banks including Tamilnad Mercantile Bank yielding 10.00%.

 

The Indian rupee has weakened today against the US dollar to a level of Rs. 50.91/92 per dollar on increased demand for the dollar from importers as well as weaker trends in the the domestic stock markets. The rupee is however off its lowest levels of Rs. 52.20 per dollar hit in early March.

A stronger rupee helps importers but it hurts exporters of products from India.

NRIs making inward remittances to India to India through their NRE or NRO accounts or through other means will also benefit from a strengthening of the dollar against the rupee.

January 27, 2008, Ratekhoj.com. South Indian Bank, a private sector bank in India, has launched the SIB:80 fixed deposit scheme to commemorate the 80th anniversary of the bank. This fixed deposit scheme is offered for a duration of 39 months and the interest rate for non-senior citizens is 11.00%. This is the highest interest rate offered by any bank in India currently for fixed deposits. The interest rate for senior citizens for this scheme is 11.25%.

The scheme also offers free accident death insurance cover up to Rs. 1 lac per individual aged up to 70 years. Premature closure of this fixed deposit is permitted. The bank can be contacted for this scheme by visiting any of their branches, by calling Toll Free : 1800 843 1800 or 1800 833 1800 or the SIB, HO-Marketing Dept. at +91-487-2444606 or by email: customercare@sib.co.in. This scheme is valid for a limited time only.

This scheme is also applicable to Non Resident Ordinary (NRO) accounts.

 

November 11, 2008, Ratekhoj.com. ICICI Bank, a private sector bank operating in India, is now offering the highest interest rate for NRO fixed deposits among all the banks in India. ICICI Bank is offering the highest fixed deposit rate of 11.50% for several terms between 1 and 2 years for fixed deposit amounts above Rs. 15 lacs. These NRO fixed deposit terms include 1 year to 389 days, 390 days, 391 days upto 589 days, 590 days and 591 days upto 2 years.

The next highest interest rate for NRO fixed deposits of 11.25% is offered by DBS Bank for a fixed deposit term of 1 to 2 years. This is also the highest interest rate being offered for fixed deposit amounts below Rs. 15 lacs.

There are several banks offering an interest rate of 11.00% for NRO fixed deposits currently. They include Axis Bank, IndusInd Bank, ING Vysya Bank, Karur Vysya Bank and Tamilnad Mercantile Bank. This rate is being offered for various fixed deposit terms between 1 year and 1000 days.

Analysis of NRO top 20 fixed deposit interest rates at Ratekhoj.com shows that NRO fixed deposit rates are at their highest in recent years. However with several banks announcing fixed deposit rate cuts in the next several weeks, it’s likely that NRO rates will also come down. It maybe a good time to lock in the high NRO fixed deposit rates being offered now.

October 22, 2008, Ratekhoj.com. DBS Bank, a foreign bank operating in India, is now offering the highest interest rate for NRO fixed deposits among all the banks in India. DBS Bank is offering the highest fixed deposit rate of 11.25% for a term of 1 year to 2 years for fixed deposit amounts below Rs. 15 lacs.

There are several banks offering an interest rate of 11.00% for NRO fixed deposits currently. They include ING Vysya Bank, Union Bank of India, Karur Vysya Bank and Tamilnad Mercantile Bank. This rate is being offered for various fixed deposit terms between 1 and 3 years.