The interest rate on these FDs is compounded on a quarterly basis. These interest rates are very high and as well as the interest earned is tax exempted as well. You can also get loans against these FDs. The loans are provided subjected to restrictions on the use of the deposited funds. The interest rate applicable to loans against FDs ranges from 7 percent to 10.5 percent.

Special Fixed Deposits

If you have a NRSR Account (Non Resident Special Rupee Account), you can make an FD for any period ranging from 15 days to 10 years. The interest rates applicable to these deposits are same as those offered to resident investors. The interest earned on the deposits and the principal amount will be non-repatriable. The interest earned will be subject to tax deducted at source by the banks.