Three South-based banks hike NRE deposit rates

Karnataka Bank Ltd has increased interest rates on NRE deposits with effect from December 19.

A bank release said here that the bank has increased the interest rates on NRE deposits from 3.82 per cent to 9.75 per cent for one year to less than two years; from 3.51 per cent to 9.50 per cent for two years to less than three years; and from 3.64 per cent to 9.50 per cent for three years to five years.

The above rates are applicable to all fresh NRE term deposits and renewals of maturing deposits from December 19.

The bank hopes to accelerate the flow of foreign funds with the enhanced interest rates, the release added.

South Indian Bank has also hiked its NRE term deposit rate for all maturities from 3.82 per cent to 6.75 per cent. This revision was effected from December 19.

The bank has in a circular stated that interest on NRE deposits are tax free and both — deposit and interest — freely repatriable.

Lakshmi Vilas Bank

Lakshmi Vilas Bank has also decided to hike the interest rate on NRE deposits bringing the rate closer to resident deposits.

The new rates would come into effect from December 22.

For deposits in the one-to-two-year maturity slab, the rate has been raised to 10 per cent and for the 2-3-year bucket to 8 per cent and those maturing beyond the three-year period to 7 per cent.