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The Complete Guide to NRE Recurring Deposit Accounts

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Moving out of India, whether for business or personal reasons, involves a lot of changes. This includes the way you manage your finances. As a non-resident Indian (NRI), if you want to continue investing back home, you can do that easily with an NRE (Non-Resident External) Recurring Deposit account. Here’s a guide to understanding how an NRE RD works, including NRE recurring deposit interest rates and more.

What Is an NRE Recurring Deposit Account?

While non-resident Indians can bank in India, there are some special rules and regulations in place. Under the Foreign Exchange Management Act (FEMA), non-resident Indians cannot have bank accounts similar to those that resident Indians can have. However, several NRI accounts can meet your investment and savings needs. These include NRE RD accounts. This type of account, maintained in rupees, offers attractive interest rates on maturity.

With this account, you can invest small sums in India every month. A predetermined amount gets added to your deposit every month. It earns the same interest during a specific term.

On maturity, you receive the accrued value of all your installments along with the earned interest. Another significant advantage of investing money in an NRE RD is that the interest you earn is not taxable in India.

What Features Are Important When Choosing a Bank for an NRE RD?

The NRE recurring deposit interest rates and other available benefits can vary from one bank to another. That’s why, before choosing a bank to open an NRE recurring deposit, there are certain features you must consider. For example:

  • Your Funds Should Be Repatriable:
    Your funds, both principal and interest, must be fully and freely repatriable.
  • The Bank Must Offer Ease of Funding:
    You should be able to transfer funds with ease from your NRE savings account every month.
  • Your Funds Should Be Maintained in Indian Rupees:
    Your funds should be maintained in the Indian currency.
  • Interest Should Be Exempt from Tax Deductions:
    The interest your deposits earn should be exempt from tax deductions.
  • The Bank Should Offer Suitable Deposit Tenure:
    You should have the freedom to choose a suitable deposit tenure. For instance, with IndusInd Bank, you can take advantage of competitive NRE recurring deposit interest rates. Terms range from a minimum of one year up to a maximum of ten years.

It is important to note, however, that banks will pay no interest income if you close your NRE deposit account within twelve months.


How Do You Open an NRE Recurring Deposit Account?

Opening a recurring deposit in India from abroad may sound like a lengthy process. However, nowadays it is easy to do.

For instance, all you need to do is follow a few quick steps to open an NRE RD account. State-of-the-art digital banking features make this possible today. Start by checking the prevailing NRE recurring deposit interest rates. Check also to see if you meet the specified eligibility criteria. Then get your deposit account running.

Once you meet the criteria and understand the paperwork requirements, you can apply online through the bank’s website. Or you can download the deposit opening form.

Fill out the form, upload it along with any relevant documents, and submit it online. Alternatively, mail the completed form to the bank address. If you cannot file the application online or download the necessary form, you can connect with the bank and request help with your application.



As you can see, starting an NRE recurring deposit helps you set aside funds every month. This enables you to earn interest without the risk of facing market fluctuations. Moreover, opening an account is a cakewalk. So what are you waiting for? Open your NRE RD today.