Best NRE savings accounts for NRIs 2024

Settling abroad has become a cherished aspiration for many Indians today. The trend of relocating to foreign countries, whether for employment, education, enhanced opportunities, or a better quality of life, is on the rise. This shift has led to a growing need for banking solutions in India that can be efficiently managed and opened specifically by NRIs and PIOs.

In this blog, we will explore the basic definitions to top Non-Resident External (NRE) accounts available in India, providing insights into key features, interest rates, and minimum balance requirements offered by leading banks such as SBI, ICICI Prudential, HDFC etc. We’ll guide you through a comparison of these accounts to help you choose the best option for your needs, ensuring you make an informed decision about managing your finances effectively.

Who Is an NRI?

A person of Indian origin who resides abroad for more than 183 days in a financial year is called NRI (Non Resident Indian). Individuals living outside India without any intention of returning, or who are uncertain about when they will come back, can also be considered NRIs, unlike those who have gone abroad for specific purposes such as education or employment.

What is an NRE account? 

NRE (Non-Resident External) accounts are designed for NRIs to manage and invest their foreign funds in India. These accounts allow NRIs to deposit foreign currency and withdraw it in rupees, as a regular account doesn’t serve these purposes. Depending on their needs, NRIs can choose between an NRE or an NRO account.

Key Features of NRE Accounts

Different banks provide a variety of features and services for NRE accounts, so it's important to evaluate each option thoroughly. Here are some of the key features offered by various banks to help you choose the one that best suits your needs.

1.  Many banks in India offer NRI services, and the features of their NRI accounts vary. These include minimum balance requirements, interest rates, internet and phone banking options, ATM and debit card functionalities, as well as special services.

2. The NRE account of NRI is in Indian rupee only.

3. An NRE account can be held jointly, but only with another NRI.

4. An NRE account can take the form of a current account, savings account, recurring deposit, or fixed deposit.

5. Funds held in NRE savings accounts are exposed to currency exchange rate risks.

6. Banks offer cards and cheque book facilities, allowing the NRI's family to access and use the funds.

7. Only income earned from a foreign country can be deposited into an NRE account, while earnings made in India are not eligible for deposit.

8.  Various banks in India also provide nomination services.
9. Earnings from an NRE account are not subject to tax, as both the principal and interest are exempt from taxation.

10. NRIs and PIOs (people of Indian origin) can set up an NRE account at a licensed bank in India, in accordance with the rules set by the Reserve Bank of India (RBI).

11. Transfers can be made effortlessly between NRE accounts or from an NRE account to an NRO account.

Understanding different types of accounts

There are multiple account options available, but the most common and best NRI account in India include NRE, NRO, and FCNR. Let’s dive into these accounts in detail.

a) NRE Vs NRO

There are several differences in the features and services offered by various banks for both types of accounts. The choice between an NRE and NRO account depends on the individual's specific needs and preferences.

b) Foreign Currency Non-Resident Account (FCNR)

An FCNR (Foreign Currency Non-Resident) account enables NRIs and POIs to deposit funds in the currency of their current country of residence. These deposits are held in one of the foreign currencies approved by the Reserve Bank of India (RBI), facilitating easier international fund management for NRIs and POIs.

Best NRE account in India

There are many banks in India where you can open an NRE account. It's crucial to review and compare the services offered by different banks to find one that best meets your needs. Consider factors such as deposit limits, interest rates, and other services, and choose the bank that aligns with your requirements. Here, we will explore the details of the 8 best bank for NRE account:

Numbers may vary slightly based on the specific bank and regulations. 

I. Axis Bank- 

The Axis Bank NRE account is regarded as one of the top choices for NRIs. Here are the key features and advantages of the Axis Bank NRE account:

a) Monthly Average Balance:

> ₹10,000 to ₹12,000 for an easy savings account

> ₹25,000 for a prime savings account

b) Account Management: You can authorize a resident to operate the account on your behalf.

c) Interest Rates: Ranges from 3.0% to 3.50% per annum.

d) Banking Access: Provides convenient access through internet and mobile banking.

II. HDFC Bank- 

a) Balance Requirements: Maintain a minimum balance of ₹10,000 in Metro/Urban branches and ₹5,000 in Semi-Urban/Rural branches.

b) Interest Rates: The HDFC NRE account offers interest rates between 3% and 3.50%.

c) Higher Earnings: Benefit from elevated interest rates on your NRE savings.

d) International Debit Card: Enables convenient cash withdrawals and purchases globally.

III. HSBC Bank-

a) Balance Requirement: HSBC NRE account holders must maintain an Average Quarterly Balance (AQB) of ₹1,50,000, which can be spread across savings, current accounts, or fixed deposits.

b) Interest Rate: The HSBC NRE account offers some of the highest interest rates available.

c) Fund Remittance: NRIs can transfer funds into their NRE savings account from any bank abroad.

d) Tax Benefits: Interest earned on the HSBC NRE account is not subject to tax in India. To learn more about tax deduction in insurance read our blog on tax saving tips.

IV. State Bank of India (SBI)-

a) Average Balance: ₹1,00,000 is required for urban branches, while ₹50,000 is needed for rural branches.

b) Interest Rate: The interest rate for an NRE account is 4.90% p.a.

c) Banking Facilities: Internet banking services and international debit cards are provided to all NRE account holders.

V. ICICI Bank-

ICICI bank is one the most preferred banks for NRE saving accounts in India.

Some key features are- 

a) Balance Requirements: Maintain a monthly average balance of ₹25,000 at the account level and ₹10,000 at the customer ID level.

b) Interest Rates: ICICI NRE account interest rates range from 3% for balances below ₹50 lakh and 3.50% for balances above ₹50 lakh.

c) Repatriation and Tax Benefits: Funds are fully repatriable, and the interest earned is tax-free in India.

d) Banking services: Internet banking services are also available to all.

VI. Bank of Baroda-

a) Minimum Balance: An average minimum balance of Rs. 50,000 per quarter is required for a Bank of Baroda NRE account.

b) Deposit Rates: NRE deposit rates begin at 4.90% for a one-year term.

c) Banking Facilities: 24-hour net banking services are provided.

d) Tax Benefits: Interest earned on NRE accounts is exempt from tax.

VII. YES Bank- 

a) Minimum Balance: Deposit holders must maintain a minimum balance of ₹10,000.

b) Interest Rates: Yes Bank offers interest rates ranging from 4% to 6.25% per annum, based on the deposit amount:

> 4% for up to ₹1 lakh

> 4.25% for ₹1 lakh to ₹5 lakh

> 5% for ₹5 lakh to ₹10 lakh

> 6% for ₹10 lakh to ₹1 crore

> 6.25% for ₹1 crore to ₹10 crore

> 6% for ₹10 crore to ₹25 crore

c) Personalised Service: A dedicated personal relationship manager is assigned to account holders.

VIII. Kotak Mahindra Bank- 

a) Minimum Balance: Kotak Mahindra Bank requires a minimum average balance of ₹ 10,000 per month for NRE accounts.

b) Interest Rates: Interest rates begin at 4.60% for a one-year term.

c) Banking Services: Internet and home banking facilities are available.

d) Account Eligibility: The account can be opened jointly by NRIs and PIOs only.

These are the top 8 best bank for NRE account in India where NRI’s and POI’s can open their account. Banks such as SBI, ICICI, and HDFC are renowned global brands with a solid reputation in the banking sector and therefore, are included in the best NRE account in India.

These accounts are tailored for Indian citizens living abroad, allowing them to save in India and earn tax-free interest on their deposits.

Final Thoughts

Selecting the best NRI account in India involves assessing various factors such as the services provided, benefits offered, interest rates, and the overall banking experience to effectively manage your funds.

But managing your finances is only part of the equation. Equally important is ensuring that you have adequate health insurance coverage. By leveraging your NRE account to build a robust financial cushion, you can afford comprehensive health insurance plans for yourself and your loved ones in India, providing the essential protection against medical expenses.

Selecting an NRE account from various banks can be complex, and choosing the right health insurance is no different. Find more tips on how to buy best health insurance in India through our blogs here.