NRIs are going to get more interest for their deposits in India. Recently the Reserve Bank of India has insisted all the banks to offer more return to their deposits. The banking sector has increased rate of interest for the Non Resident External deposits. Several banks are offering increased interest rate for the non resident Indians. The Federal Bank has increased the interest rate to 9% , for the deposits from three years to ten years. This is better than the domestic interest rate of 8.75%.
Due to this increment, the Federal Bank is enjoying a 50 % increase in its NRE deposits, in the first quarter. South Indian Bank has also increased the rate of interest to 9.5%., for the deposits in the 3 years to 10 years bucket. For Indian deposits, the rate of interest is only 8.75%. The Axis Bank now offers 9.5% interest for the 3 to 10 years deposits. Earlier, the rate of interest was 8.75%. In addition, the non resident Indians are going to get their currencies, instead of INR.