Federal Bank NRE Account

Federal Bank shows that a small Indian bank can offer more value to NRI customers than some of the largest ones. Here’s how.

Federal Bank has a huge base of NRI customers at over 1.2, million with a large network of remittance partners across the globe. It has remittance arrangements with more than 110 banks and exchange companies worldwide, accounting for 15% of India’s inward remittances. But, this bank has only too few branches and ATMs in India, especially considering the fact that it is a 70-year-old institution. Even overseas, it has representative offices only in Abu Dhabi, Dubai, Qatar, Kuwait and Oman.

Federal Bank NRE Account Features

Key features offered by Federal Bank include:

  1. Wide range of interest rates for the NRE savings account, which are lower for deposits less than or up to ₹50 lakhs at 3.5% p.a. For deposit balances above ₹10 crore, interest rates are higher, ranging from 6.3% to 7.2%. These are calculated on daily account balances and paid on a quarterly basis.
  2. High interest rates for fixed deposits, at an average of 7% for short and long-term tenures.
  3. More than 6 types of NRI accounts are offered, with exclusive features
  4. Free internet, phone and mobile banking
  5. International Visa Gold debit card with ₹100,000 daily limit for ATM withdrawals and ₹100,000 daily limit for online and retail shopping.
  6. Free email and mobile notifications
  7. Free cheque book, up to 40 leaves per year
  8. Low average monthly balance requirement of ₹5,000
  9. Easy remittance services from several countries across the world, including the US, UK and Australia. Customers can choose from several options, like SWIFT, Remit2India, Transfast, Xoom Corporation and Lock Box.
  10. Low transaction charges and fees on account usage.
  11. For premium and privilege NRI account holders, there are many relaxations with respect to banking charges and withdrawal limits.
  12. Exclusive insurance schemes for NRIs, such as Fed Oriental Pravasi Insurance
  13. Customers can pay utility bills through internet banking
  14. Loan schemes for NRI customers, including car, house and gold loans.
  15. Priority banking branches for NRIs in many Indian cities
  16. Remittances through cash transfers are allowed, via Western Union, Xpress Money and FED e-cash schemes, among others.

Limitations

  1. Very few branches in many Indian cities, particularly in Northern India
  2. Absence of branches in major overseas locations, such as the US, UK and Europe
  3. Account opening can take a while to process
  4. Lower interest rates for low deposit balances

Advantages

  1. All modern banking facilities available
  2. Easy and economical remittance services; with a huge range of channel options
  3. Low MAB (Monthly Average Balance) requirements
  4. Comparatively good customer services

Disadvantages

  1. Lower interest rate on balance up to ₹50 lakhs than most Indian banks
  2. Very few ATMs and branches in Indian cities
  3. No branches overseas, except in the Middle East.

Do you have experience banking with Federal bank and its NRI services? Please share your experience below so others can benefit from it.

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