According to reports from NDTV Profit, Axis Bank has revised interest rates on its Non-Resident External (NRE) fixed deposits from August 26, offering higher rates on select NRI FDs. The private lender now provides two distinct NRI FD options with different interest rates and withdrawal conditions for non-resident Indians. This rate revision comes as the banking sector faces unprecedented liquidity challenges, with surplus liquidity in the system reaching a record high of ₹10.3 lakh crore as of September 3, forcing the central bank to step up liquidity absorption operations.
As reported by NDTV Profit, the regular NRI Fixed Deposit offers 6.25% interest for tenures of one year to less than 15 months for deposits below ₹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. For deposits of ₹3 crore to less than ₹5 crore, the rate is 6.15% across all listed tenures. Larger deposits of ₹5 crore to less than ₹25 crore earn 6.40% for one year to less than 15 months, 6.30% for 18 months to less than two years, and 6.20% for tenures of two years and above. Deposits of ₹25 crore and above have varying rates ranging from 6.35% to 6.50% depending on the maturity period. This structure provides flexibility for NRIs seeking secure, tax-free returns while maintaining access to funds through premature withdrawal options.
According to NDTV Profit, the Plus variant is available for NRE deposits of ₹3 crore and above and offers significantly higher interest rates in exchange for restricted access. Deposits between ₹3 crore and less than ₹5 crore earn 6.35% across listed tenures, while deposits of ₹5 crore to less than ₹25 crore receive 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%. For deposits of ₹25 crore and above, the highest rate under the Plus variant is 6.70% for tenures from one year to less than 15 months, 6.60% for 15 months to less than 18 months, and 6.55% for 18 months to 10 years. Notably, premature withdrawal is not permitted under the Plus option, making it suitable only for investors confident they will not need access to funds during the chosen tenure. This option becomes particularly attractive as banks actively seek viable investment options amid the current liquidity surplus.
As reported by NDTV Profit, the choice between the two options essentially depends on liquidity requirements versus higher returns. The regular NRI Fixed Deposit offers flexibility with premature withdrawal options, though applicable rules and charges may apply. The NRI Fixed Deposit Plus can provide higher interest rates but locks funds until maturity. For NRIs with ₹3 crore or more who are confident 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 opt for the regular NRI Fixed Deposit, even if it offers comparatively lower interest rates. The updated rates reflect the competitive landscape in the NRE deposit market, with Axis Bank positioning itself among the top providers for NRI investors seeking secure, tax-free returns on their foreign earnings. This strategy becomes increasingly relevant as banks face the challenge of managing record-high liquidity surplus while maintaining profitability.
