NRI Fixed Deposits — NRE, NRO & FCNR(B)
Which NRI deposit to choose — tax treatment, repatriation, currency risk, tenure and TDS for NRE, NRO and FCNR(B) fixed deposits.
Updated 30 September 2026 · 25 banks trackedWhat you need to know
Non-resident Indians (NRIs) and OCIs cannot hold resident FDs. Instead they use NRE and FCNR(B) deposits for money earned abroad, and NRO deposits for income earned in India (rent, dividends, pension). Rates for NRE FDs usually match the bank’s resident card for 1 year and above.
NRE vs NRO vs FCNR(B)
| Feature | NRE FD | NRO FD | FCNR(B) |
|---|---|---|---|
| Currency | Indian rupee | Indian rupee | USD, GBP, EUR, JPY, CAD, AUD, etc. |
| Source of funds | Foreign earnings | Indian income (rent, pension, dividends) | Foreign earnings |
| Tenure | 1 – 10 years | 7 days – 10 years | 1 – 5 years |
| Interest tax in India | Tax-free while NRI | Taxable; TDS 30% + surcharge + cess (lower under DTAA) | Tax-free while NRI |
| Repatriation | Fully repatriable | Up to USD 1 million per FY (with Form 15CA/CB) | Fully repatriable |
| Currency risk | Yes (INR) | Yes (INR) | No — held in foreign currency |
| Joint holding | With another NRI (or resident on former-or-survivor basis) | With resident or NRI | With another NRI |
Which one should you choose?
- Sending savings from abroad and want tax-free interest → NRE FD.
- Want to avoid rupee depreciation and return money abroad later → FCNR(B).
- Have rent, pension or other Indian income to park → NRO FD (claim DTAA relief with TRC and Form 10F).
When you return to India
- Inform the bank; NRE/NRO deposits must be re-designated as resident deposits.
- NRE FDs may continue till maturity at the contracted rate, but interest becomes taxable once you become a resident (subject to RNOR status rules).
- FCNR(B) deposits can continue till maturity and then move to a Resident Foreign Currency (RFC) account.
Frequently asked questions
Is NRE FD interest taxable in India?
No, as long as you remain a non-resident under FEMA and the Income-tax Act.
Can I open an NRE FD for less than 1 year?
No. The minimum tenure for NRE term deposits is one year.
Why is TDS so high on NRO FDs?
Tax is deducted at 30% plus surcharge and cess; you can claim a lower DTAA rate by giving the bank a Tax Residency Certificate and Form 10F.
Information is for education and comparison. Rates and rules change — confirm with your bank and a tax adviser before investing. FinancePortal is not a financial or tax adviser.