You have money in your NRO account. Maybe rent, maybe a pension, maybe what’s left from selling a flat. An FD is the obvious place for it, and right now the highest rate is 7.25% at Yes Bank.

You won’t get 7.25%, though. Your bank deducts 31.2% tax before the interest reaches you, so it lands as 4.99%. If you live in the Gulf, or your Indian income is modest, most of that deduction is money you can get back.

Please note:
Rates checked on each bank’s official website on 29 September 2026, for deposits below ₹3 crore.

NRO FD Interest Rates 2026: ICICI vs SBI vs HDFC vs Axis and 6 More Banks

Banks use different tenure bands, so each cell shows the band that covers that period at that bank. Exact bands for every bank are in the bank-wise rate cards at the end.

A few things stand out:

• The sweet spot is 15 months to 3 years. Eight of these ten banks pay their highest rate somewhere in that window.

• For short parking, look at IDFC FIRST. It pays 6.50% from 181 days, which beats what most of these banks pay for a full year.

• SBI, Bank of Baroda and PNB hide their best rates in odd tenures like 444 or 555 days. Book 450 days and you’re back on the standard rate.

NRO rates are identical to resident FD rates at all ten banks. What NRIs miss out on is the senior citizen extra (more on that below).

NRO FD Tax Under DTAA: USA, UK, UAE etc

Put ₹10 lakh in a 7.25% NRO FD for a year and it earns ₹72,500. Your bank deducts ₹22,620 as TDS, and ₹49,880 reaches you.

That 31.2% (30% tax plus 4% cess) is deducted on every rupee of interest. NRIs get no threshold and can’t use Form 15G or 15H to skip it. But TDS is only a deduction at source. The tax you actually owe is often much lower, and how much you can recover depends mostly on where you live.

The cap comes from India’s tax treaty with each country. If you live in the Gulf or Singapore, Indian tax is the whole bill, so everything you recover is yours to keep. If you live in Qatar, the new India-Qatar treaty applies from 1 April 2026, so it’s worth checking your bank is using it.

If you live in the US, UK, Canada or Australia, it’s less forgiving. You pay tax at home too, and you can only offset Indian tax up to the 15% cap. The IRS says so directly: the credit is limited to the treaty rate “even if” more was withheld. So if 31.2% was deducted and you do nothing in India, the extra 16.2% is simply gone.

Some rate sites list a 10% treaty rate for the US, UK and Singapore. That rate applies when a bank is the lender, so it doesn’t cover your deposit.

TDS on NRO FD Interest: How to Pay Less and Claim a Refund

There are two ways, and most NRIs should use both.

Claim the DTAA Rate on Your NRO FD

You need a Tax Residency Certificate from the country you live in, and Form 41 filed online on the income tax portal (there’s a separate login if you don’t have a PAN). Banks usually add their own DTAA form and passport and visa copies, and most want the set renewed every financial year. If yours asks for attested copies, Rupeeflo’s digital notarization gets them attested over a video call from your phone.

Claim an NRO FD TDS Refund Through Your ITR

NRIs pay tax at normal slab rates, and under the new regime the first ₹4 lakh of income is tax-free and the next ₹4 lakh is taxed at 5% (Income Tax Department). If your Indian income is modest, the tax you owe is below even the treaty rate, and the return refunds the difference.

*If the FD interest is your only Indian income, under the new tax regime.

As a rough guide, if your total Indian income is under about ₹25 lakh a year, filing a return gets back more than the treaty rate alone. Claiming the treaty rate at source still helps, because less of your money is held back while you wait for the refund.

One catch: the rebate that makes income up to ₹12 lakh tax-free is for resident individuals only. As an NRI, you pay slab tax on everything above ₹4 lakh.

NRO FD vs NRE FD: Which Should You Choose?

It depends where the money came from. Money earned in India, like rent, pension, dividends or sale proceeds, belongs in NRO, and an NRO FD is the right home for it. You can still move up to USD 1 million a year of it abroad, with a CA certificate (Form 146) and a declaration on the income tax portal (Form 145).

If you’re sending money from abroad, look at an NRE FD too. The rates are the same at every bank here, the interest is tax-free in India, and the money is fully repatriable. The trade-off is lock-in: NRE FDs need at least a year, and most banks pay no interest if you break one sooner. NRO FDs can run for as little as 7 days.

NRO FD Rules to Know Before You Book

Two banks can quote the same rate and leave you with very different outcomes. Four rules make the difference, and none of them show up in a rate table.

The senior citizen rate doesn't apply to you.

Residents over 60 earn 0.50% to 0.75% extra, and most rate pages show that higher figure prominently. None of these ten banks extend it to NRIs, whatever your age. HDFC's rate page is blunt about it: "The Senior Citizen Rates are only for Resident Indians and do not apply to NRIs." So if you're over 60, compare banks on the general rate, and treat any senior rate you see quoted as someone else's.

Breaking early costs more at some banks than others.

If you close an FD before maturity, the bank pays the rate for the time your money actually stayed in, minus a penalty. A 2-year FD at 7.25% broken at six months earns the six-month rate, less that penalty. The penalty itself varies more than most people expect:

If there's a real chance you'll need the money within a year, Kotak's terms can be worth more than a slightly higher rate elsewhere.

A cumulative FD doesn't delay the tax.

It's tempting to pick the cumulative option and deal with tax at maturity, but banks deduct TDS as interest accrues each year. A 3-year cumulative FD is taxed in year one, even though you receive nothing until year three. That also means the refund claim described above is an every-year job, and so is renewing your DTAA paperwork.

Deposit insurance stops at ₹5 lakh per bank.

DICGC covers up to ₹5 lakh per depositor per bank, interest included. Above that, your money is only as safe as the bank itself. That's why NRIs putting in larger amounts often split them, pairing one of the higher payers with one of the big four.

NRO FD FAQs

Which Bank Has the Highest NRO FD Rate?

Yes Bank, at 7.25% for 18 months 1 day to under 24 months, followed by IDFC FIRST at 7.10% and IndusInd at 7.00%. Among the largest banks, ICICI, HDFC and Axis pay up to 6.50% and SBI pays up to 6.45%.

Is the SBI NRO FD Rate the Same as ICICI and HDFC?

Close, but not identical. All three pay 6.25% for 1 year. At 3 years, ICICI and HDFC pay 6.45% and SBI pays 6.30%. SBI’s best rate, 6.45%, is on its 444-day Amrit Vrishti deposit.

Why Is My Bank Still Deducting 31.2% TDS on My NRO FD After I Sent My TRC?

Usually one of three reasons: Form 41 wasn’t filed on the income tax portal, your TRC has expired, or the paperwork reached the bank after that quarter’s interest was credited. Banks generally can’t reverse TDS once it’s deducted, so you recover it through your return.

Can I Open an NRO FD Jointly With a Resident Indian?

Yes. RBI allows NRO accounts to be held jointly with a resident relative, on a “former or survivor” basis.

Do NRIs Need to File an ITR if TDS Is Deducted on NRO FD Interest?

Not if TDS covers all the tax you owe. But you have to file to get a refund, and if your Indian income is small, that refund can be most of the TDS.

How Often Do NRO FD Interest Rates Change?

Banks usually revise rates within weeks of an RBI policy decision, and sometimes in between. ICICI, Axis and Kotak all changed theirs in the last week of September 2026. We update this page when rates move.

ICICI Bank NRO FD Interest Rates

Effective 24 September 2026. Source

SBI NRO FD Interest Rates

Effective 15 May 2026. Source.

HDFC Bank NRO FD Interest Rates

Effective 19 August 2026. Source

Axis Bank NRO FD Interest Rates

Effective 26 September 2026. Source.

Yes Bank, IDFC FIRST, IndusInd, Kotak, Bank of Baroda and PNB NRO FD Interest Rates

Yes Bank NRO FD Interest Rates

Effective 2 June 2026. Source

IDFC FIRST Bank NRO FD Interest Rates

Effective 1 September 2026. Source

IndusInd Bank NRO FD Interest Rates

Effective 24 July 2026. Source

Kotak Mahindra Bank NRO FD Interest Rates

Effective 23 September 2026. Source

Bank of Baroda NRO FD Interest Rates

Effective 12 June 2026. Source

PNB NRO FD Interest Rates

Effective 1 June 2026.
Source

Banks can change rates without notice, so confirm with your bank before booking. This article is for information and isn’t tax or investment advice.