SBI's NRE Account: Features, How To Avail Loans, Interest Rates

State Bank of India (SBI), the largest lender of the country, allows non-resident Indians (NRI) customers to open a Non Resident External (NRE) Account.

Budget 2018 | | Updated: February 10, 2018 12:08 IST
SBI's NRE Account: Features, How To Avail Loans, Interest Rates

SBI's NRE accounts can be opened with close resident relatives on "former or survivor" basis.

State Bank of India (SBI), the largest lender of the country, allows non-resident Indians (NRI) customers to open a Non Resident External (NRE) Account. NRE accounts allow NRI customers to park their overseas earnings remitted to India and converted to Indian Rupees. NRE accounts can be opened either individually or jointly with other NRIs / persons of Indian origin (PIOs) / Overseas Citizens of India (OCIs), said SBI on its website, onlinesbi.com. The account types permissible to NRIs are as follows: Savings Bank account, Current Account, Term Deposits (TDR), Special Term Deposits (STDR) and Recurring Deposits (RD).


Five features of an NRE account:

1. Funds deposited in the account will be in the form of fresh remittances from overseas or transfer from other NRE / NRO / FCNR (B) accounts.

2. NRE accounts can be opened with close resident relatives on "former or survivor" basis.

3. NRE accounts can be withdrawn for making local payments in rupees, said SBI.

4. Interest earned on NRE accounts is exempt from Indian Income tax.

5. Rupee loan is available against NRE Deposits.


How to avail loans against NRE Deposits:

You can avail a loan in Indian rupees against the security of NRE - TDR / STDR / RD deposits. The loan may be used to meet emergency financial requirements, to carry on business activities, for direct investment in India or for acquiring a flat / house in India, according to onlineSBI.

You need not close the deposit prematurely, and can avail the loan at the SBI branch where you maintain the deposit, as an overdraft or as a demand loan. A maximum loan of 90 per cent of the face value of the deposit including the interest accrued can be availed. The applicable interest rate on loan against Deposits is at 1.00 per cent over the rate paid on the relative deposit offered as security, said SBI.


Interest rates on SBI's NRE Savings Bank account

Revision of Interest Rates on Savings Bank Deposits With effect from 31st July 2017:
 
ParticularsRate of Interest
Saving Deposits Balance upto Rs. 1 crore.3.50% p.a
Saving Deposits Balance above Rs. 1 crore.4.00% p.a


Interest rates on NRE fixed deposits

NRE TERM DEPOSITS With effect from 30th January, 2018
TenorsBelow Rs.1 CroreRs.1 Crore & up to 10 CroresAbove Rs.10 Crores
1 year6.25%6.25%6.25%
Above 1 year to 455 days6.25%6.25%6.25%
456 days to less than 2 years6.25%6.25%6.25%
2 years to less than 3 years6.00%6.00%6.00%
3 years to less than 5 years6.00%6.00%6.00%
5 years and upto 10 years6.00%6.00%6.00%
Premature withdrawalNo interest is payable if the deposit is withdrawn before one year.No interest is payable if the deposit is withdrawn before one year.No interest is payable if the deposit is withdrawn before one year.
Effective 01st April 2017, Penalty for Premature Withdrawal for Retail Term Deposits upto Rs.5.00 lacs will be 0.50% (all tenors).On pre-mature withdrawal of the deposit (after completion of 1 year), interest will be paid at applicable rate for the period the deposit has actually remained with the Bank or contracted rate less Premature Penalty of 1%, whichever is lower.On pre-mature withdrawal of the deposit (after completion of 1 year), interest will be paid at applicable rate for the period the deposit has actually remained with the Bank or contracted rate less Premature Penalty of 1%, whichever is lower.
In all other cases, on pre-mature withdrawal of the deposit (after completion of 1 year), interest shall be 0.50% or 1% below the rate applicable at the time of Deposits for the period Deposit remained with the Bank or 0.50% or 1% below the contracted rate, whichever is lower.




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