If you’re a Non-Resident Indian (NRI) exploring safe and rewarding ways to grow your income, NRI term deposits in India are a smart choice in 2025. With many Indian banks offering interest rates of up to 7.90% per annum, these fixed deposit schemes not only ensure capital security but also offer attractive returns—tax-free in India.
In this guide, we will walk you through everything you need to know about NRI term deposit interest rates in India, including which banks offer the best deals, tax exemptions, tenure options, repatriation rules, and how to choose the best scheme based on your financial goals.
NRI Term Deposit Interest Rates in India 2025
| Feature | Details (As of April 2025) |
|---|---|
| Top Interest Rate | 7.90% (Bajaj Finance, 22-month FD) |
| Popular Banks | SBI, HDFC, ICICI, Axis Bank, IndusInd Bank, Federal Bank |
| Minimum Tenure | 1 year (as per RBI rules for NRE FDs) |
| Taxation | Interest is tax-free in India (as per Income Tax Act, Section 10(4)(ii)) |
| Repatriation | Principal and interest are fully repatriable |
| Best for Short-Term | IndusInd Bank – 7.75% for 1-year FD |
| Best for Medium-Term | Axis Bank, Federal Bank – Up to 7.30% for 2-3 years |
| Official Website (SBI) | sbi.co.in |
NRI term deposit interest rates in India are currently among the most attractive investment options for overseas Indians. With interest rates up to 7.90%, tax exemptions, and full repatriability, these FDs offer a unique combination of safety and high returns. Whether you’re investing for short-term goals or building long-term wealth, 2025 is an excellent time to consider diversifying into Indian fixed deposits.
What Are NRI Term Deposits and Who Can Open Them?
NRI term deposits, also called NRE fixed deposits, are savings products offered by Indian banks where NRIs can park their foreign income in Indian rupees for a fixed duration and earn interest.
To open an NRI FD, you must:
- Be a Non-Resident Indian (NRI), Person of Indian Origin (PIO), or Overseas Citizen of India (OCI)
- Hold an NRE (Non-Resident External) or FCNR (Foreign Currency Non-Resident) account
These deposits are maintained in INR, and both principal and interest are repatriable, making them an ideal vehicle for safe wealth accumulation.
see also: Post Office SCSS Scheme: Senior Citizens Will Get a Golden Opportunity to Get Pension
Latest NRI Term Deposit Interest Rates (April 2025)
Here’s a snapshot of leading NRI term deposit interest rates in India:
| Bank/NBFC | 1 Year | 2-3 Years | 3-5 Years | 5-10 Years | Special Rates |
|---|---|---|---|---|---|
| SBI | 6.70% | 6.90% | 6.75% | 6.50% | 7.05% (Amrit Vrishti – 444 days) |
| HDFC Bank | 6.60% | 6.90% | 6.75% | 6.50% | 7.05% (15–21 months) |
| Axis Bank | 6.70% | 7.05% | 7.10% | 7.00% | — |
| ICICI Bank | 6.60% | 6.90% | 6.75% | 6.50% | 7.05% (18–24 months) |
| IndusInd Bank | 7.75% | 7.25% | 7.25% | 7.00% | — |
| Federal Bank | 6.85% | 7.00% | 7.00% | 6.50% | 7.30% (444 days) |
| Bajaj Finance | 7.40% | 7.55% | — | — | 7.90% (22 months), 7.85% (33 mo) |
Tip: Choose Bajaj Finance or IndusInd Bank for the highest short-term returns.
Step-by-Step Guide to Open an NRI Term Deposit in India
Step 1: Open an NRE Account
You’ll need an NRE account with the bank where you want to create the FD. This account holds your foreign income in Indian rupees.
Step 2: Fund the Account
Transfer funds from your overseas bank account in a foreign currency like USD, GBP, AED, etc.
Step 3: Choose Tenure and Interest Payout
Select a fixed tenure—minimum 1 year and up to 10 years. Decide if you want interest:
- Quarterly payout
- Annual payout
- Reinvestment (cumulative FD)
Step 4: Submit KYC Documents
Upload scanned copies of:
- Passport (with visa page)
- Overseas address proof
- PAN card (optional but recommended)
- Recent photograph
Step 5: Complete the Deposit Online or via Branch
Banks like HDFC, ICICI, and Federal Bank allow online NRI FD bookings through their mobile apps or internet banking portals.
Why NRI Fixed Deposits Are Popular in 2025
1. Higher Interest Than Global Banks
While banks in the US or UK offer 0.5–3% returns on savings or CDs, Indian banks offer 6.5–7.9%, making NRI FDs highly attractive.
2. Tax-Free Interest in India
Interest earned on NRE deposits is exempt under Section 10(4)(ii) of the Income Tax Act, provided you qualify as an NRI during the financial year.
3. Repatriable and Safe
पोस्ट ऑफिस ग्राम सुरक्षा योजना से बनाएं सुरक्षित भविष्य, सिर्फ ₹50 में बनाएं 35 लाख का फंड
Funds can be freely sent back abroad, and your money is protected by RBI and regulated banking standards.
How to Choose the Best NRI FD Scheme
Consider the following when picking an FD:
Interest Rate
Go for schemes offering above 7%, especially for tenures below 3 years.
Reinvestment vs. Payout
If you don’t need monthly income, reinvestment FDs provide compounding benefits.
Credit Rating of Institution
Prefer banks or NBFCs with AAA ratings (like Bajaj Finance).
Premature Withdrawal Penalty
Some FDs penalize early exits. Check if you may need liquidity.
Taxation Rules for NRI FDs in India
- NRE FDs: Interest is tax-free in India. Not taxable unless you become a resident again.
- FCNR FDs: Interest in foreign currency is also tax-free in India.
- Resident FDs (if your status changes): Interest becomes taxable at slab rates.
Note: Always update your residential status with the bank when returning to India to avoid compliance issues.
see also: Post Office 5-Year FD: How Much Return Will You Get on ₹50,000?
Comparison: NRE vs. FCNR vs. RFC Deposits
| Feature | NRE FD | FCNR FD | RFC FD |
|---|---|---|---|
| Currency | INR | USD, GBP, EUR, etc. | Foreign currency (after return) |
| Taxation | Tax-free in India | Tax-free in India | Taxable |
| Tenure | Min 1 year to 10 years | 1 to 5 years | Flexible |
| Repatriability | Fully repatriable | Fully repatriable | Fully repatriable |
| Who Should Use It? | NRIs wanting INR earnings | NRIs avoiding INR risk | Returning NRIs with forex funds |
NRI Term Deposit Interest Rates in India FAQs
1. Can I open a term deposit in India without visiting the bank?
Yes. Most leading banks like ICICI, HDFC, Federal Bank, and SBI allow online account opening and FD booking for NRIs.
2. What happens if I return to India and become a resident?
You must inform the bank and convert your NRE account to a Resident or RFC account. Interest from that point becomes taxable.
3. Are NRI term deposits safe in NBFCs like Bajaj Finance?
Yes, Bajaj Finance FDs are AAA-rated and regulated by RBI. However, always check ratings and avoid overexposure to one institution.
4. Can I take a loan against my NRE FD?
Yes. Banks allow loans of up to 85–90% of the FD amount, but funds cannot be used for investments in India like real estate.
5. Is the interest rate fixed or variable?
FD rates are fixed for the tenure. Once locked in, your return does not change even if market rates drop.
