Banks increase interest rate on deposits for Non Resident Indians (NRIs)

All major banks have increased rates on their Foreign Currency Non Resident (FCNR) deposits and Non Resident External (NRE) term deposits. This article assesses the situation in detail.

The increased rates have come into effect from June 1 in most cases.

(Looking for interest rates raised by these banks in India? Please read “Banks increase interest rates for deposits and lending (loans)“).

The rates on NRI deposits are usually revised every month, based on the movement of the international benchmark London InterBank Offered Rate, or LIBOR. The banks liquidity needs also affect the interest rate that it offers.

With the interest rates decreasing in the US, and keepind steady (but low) in Europe and other major NRI hubs, this is a good opportunity for the NRI community to invest in India.

Here is a summary of what various banks have done:

State Bank of India (SBI)

SBI has increased the interest rates on its Foreign Currency Non-Resident (FCNR) deposits for six currencies: US Dollar (USD), Pound Sterling (GBP), Euro (EUR), Canadian Dollar (CAD), Australian Dollar (AUD) and Japanese Yen (JPY).

It has also increased the interest rates on Non Resident External (NRE) Term Deposits.

FCNR deposits in US Dollar having a maturity of one year to less than two years will carry an interest rate of 2.41% (2.33% earlier). The rate for deposits with a maturity of 2 to 3 years would be 2.71% (2.43% earlier). The rate for deposits with a maturity of 5 years would be 3.47% (3.11% earlier).

NRE deposits with a maturity of 1-2 years would carry an interest rate of 3.16% (3.08% earlier), while deposits for 2-3 years and 3-5 years would carry an interest rate of 3.46% (3.18% earlier) and 3.81% (3.45% earlier) respectively.

State Bank of Travancore (SBT)

State Bank of Travancore (SBT) has also increased the interest rates for FCNR and NRE term deposits.

Interest rate on FCNR deposits in US Dollars will be: For 1-2 years 2.41%, for 2-3 years 2.71%, for 3-4 years 3.06%, for 4-5 years 3.30%, and for 5 years 3.47%.

Interest rate on NRE term deposits for a period of 1 year to less than 2 years would be 3.16% (3.08% earlier). For deposits of 2-3 years and 3-5 years, the rates would be 3.46% (3.18% earlier) and 3.81% (3.45% earlier) respectively.

Indian Bank

Indian Bank has increased the interest rates for US dollar-denominated FCNR and NRE term deposits.

For FCNR deposits, the interest rate would be 2.41% (2.33% earlier) for deposits of 1-2 years, 2.71% (2.43% earlier) for 2-3 years, 3.06% (2.70% earlier) for 3-4 years, 3.30% (2.93% earlier) for 4-5 years, and 3.47% (3.11% earlier) for 5 years.

For NRE term deposits, the interest rates would be: 3.16% (3.08% earlier) for 1-2 years, 3.46% (3.18% earlier) for 2-3 years, 3.81% (3.45% earlier) for 3-5 years.

Punjab National Bank (PNB)

Punjab National Bank (PNB) has hiked the interest rates on Foreign Currency Non Resident (FCNR) deposit schemes for US Dollar, British Pound and Euro.

Syndicate Bank

Syndicate Bank has increased the interest rates on Non Residential External (NRE) Term Deposit accounts and FCNR deposits.

Bank of Baroda (BoB)

Bank of Baroda has hiked the interest rates on Foreign Currency Non Resident (FCNR) deposits and Non Resident External (NRE) Term Deposit.

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