NRE FD Rates Hit 7.60%: Is Your NRI Money Earning?

AU Small Finance Bank raised NRE FD rates to 7.60% and FCNR rates to 7.40%. If you have family abroad or are an NRI, these tax-free deposits are worth a serious look right now.

Here's what happened: AU Small Finance Bank has raised NRE fixed deposit rates to 7.60% per annum, among the more competitive rates available for NRI depositors in India.. FCNR(B) deposit rates have been hiked to 7.40%, allowing NRIs to park foreign currency earnings directly in India without conversion risk.. This move follows RBI steps to attract more foreign currency inflows into India, as banks compete to draw NRI savings back home..

What you should do: Compare NRE and FCNR FD rates across small finance banks and major private banks — rates vary widely and even 0.25% more adds up significantly on large NRI transfers.. Check whether an NRE or FCNR deposit suits your situation: NRE FDs hold rupee amounts and are fully repatriable, while FCNR holds foreign currency and shields you from exchange rate swings.. Remind your NRI family members to review where their India deposits are parked — idle savings accounts earn 3-4%, while NRE FDs at 7.60% are tax-free on Indian income tax..

Interest earned on NRE fixed deposits is completely exempt from Indian income tax — making a 7.60% NRE FD effectively better than a 9%+ taxable FD for high-bracket residents.