- Date : 12/05/2023
- Read: 3 mins
A Non-Resident Ordinary (NRO) Account is maintained by non-resident Indians, where they park the funds that they had before becoming non-resident, as well as funds that they continue to earn within India.
Interest rates have seen a rise in the last year, with RBI increasing the repo rate
NRI fixed-income investment in India has become lucrative thanks to the high-interest income
A look at the banks offering the highest NRO Deposit interest rates
The Reserve Bank of India (RBI) kept the interest rates on the ascendancy for nearly a year. This has led to a hike in retail interest rates, be it on loans or on deposits. The interest rates on NRO deposits are no exception.
Non-Resident Ordinary Account
A Non-Resident Ordinary (NRO) Account is maintained by non-resident Indians, where they park the funds that they had before becoming non-resident, as well as funds that they continue to earn within India. Typically, an account holder converts their account into an NRO account sometime after becoming a non-resident.
NRO account can be held jointly with an Indian relative or citizen. The account is maintained in Indian currency, and the fund in it cannot be repatriated or converted to any other currency. The interest income on this account is taxable in India but offers a higher rate of interest.
Interest Rates on NRO Accounts
With the RBI increasing the interest rate in India by 2.5% within a year, deposit interest rates have increased significantly. NRIs can reap the benefit of this increased income potential by increasing their funds in NRO accounts.
Small finance banks have increased their NRO deposit rates the most, with small private banks and foreign banks following suit.
Here is a look at some of the banks that are offering attractive interest rates on NRO deposits:
Two-year fixed deposit (FD) on Suryoday Small Finance Bank will yield an interest income of 8.51% per annum
Equitas Small Finance Bank is offering 8.5% interest per annum on two-year FDs
DCB Bank is offering 8% interest on two-year FDs
AU Small Finance Bank is also offering 8% on two-year FDs
Deutsche Bank is offering 7.75% on its two-year NRO FDs. The same interest rate is also offered by IDFC FIRST Bank, RBL Bank and Ujjivan Small Finance Bank
DBS Bank, Yes Bank and HSBC are offering 7.5% on their two-year NRO deposits
Apart from the interest rates offered, you must check the credit rating of the deposit product and the reputation/financial robustness of the bank. Interest rates are dynamic and may change from time to time and depend on the duration of the investment. Therefore, it is recommended that you check the interest rate at the time of opening the NRO FD account.