Are you an NRI or do you know someone looking to invest a sizeable amount in fixed deposits? If so, Axis Bank's latest revision in NRE fixed deposit interest rates could be worth taking a look.
The bank has revised its Non-Resident External (NRE) fixed deposits for non-resident Indians, with effect from Aug. 26. The private lender now offers two NRI FD options with different interest rates and withdrawal conditions.
Axis Bank offers a regular NRI Fixed Deposit as well as an NRI Fixed Deposit Plus product. While both are designed for NRE deposits, the Plus variant offers higher interest rates on several tenures. There is a catch, though. Deposits under the Plus option cannot be withdrawn before maturity.
NRI Fixed Deposit rates
Axis Bank offers an interest rate of 6.25% for tenures of one year to less than 15 months for regular NRI Fixed Deposits below Rs 3 crore. The rate increases to 6.45% for 15 months to less than 18 months and 6.50% for 18 months to less than two years. The 6.50% rate also applies to longer tenures up to 10 years.
For deposits of Rs 3 crore to less than Rs 5 crore, the interest rate is 6.15% across all listed tenures.
The rates vary by tenure and deposit size for larger deposits. Deposits of Rs 5 crore to less than Rs 25 crore earn 6.40% for one year to less than 15 months, while the rate is 6.30% for 18 months to less than two years and 6.20% for tenures of two years and above.
For deposits of Rs 25 crore and above, the applicable rates vary depending on the maturity period, with rates ranging from 6.35% to 6.50%.
https://docs.google.com/spreadsheets/d/16vn51FJnThGnoz-rPbU6MOxmhj9pEE2LZos3vACPkrs/edit?gid=0#gid=0
What is NRI Fixed Deposit Plus?
This fixed deposit plan is available for NRE deposits of Rs 3 crore and above. Its biggest difference from the regular NRI FD is that premature withdrawal is not permitted. But depositors can earn higher interest rates on several maturity periods in return.
Deposits between Rs 3 crore and less than Rs 5 crore earn 6.35% across the listed tenures. For deposits of Rs 5 crore to less than Rs 25 crore, the rate is 6.60% for one year to less than 15 months and 6.50% for 18 months to less than two years. For two years and longer, the rate is 6.40%.
As for Rs 25 crore and above, the highest rate under the Plus variant is 6.70% for tenures from one year to less than 15 months. The rate is 6.60% for 15 months to less than 18 months and 6.55% for 18 months to 10 years.
https://docs.google.com/spreadsheets/d/1tOC87o-Bx9TD8MYlA1P4Zq_gWoKAmh6a_Q6xEb-mgc4/edit?gid=0#gid=0
Which NRI FD Should Investors Choose?
The choice essentially comes down to liquidity versus higher returns.
The regular NRI Fixed Deposit offers the flexibility of premature withdrawal, although applicable rules and charges may apply. The NRI Fixed Deposit Plus, on the other hand, can offer a higher rate but locks the money in until maturity.
For NRIs with Rs 3 crore or more who are confident that they will not require the money during the chosen tenure, the Plus variant could be considered for its higher interest rates.
However, investors who may need to access their funds before maturity may go for the regular NRI Fixed Deposit, even if it offers a comparatively lower interest rate.
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