HDFC Bank has raised interest rates on Foreign Currency Non-Resident (FCNR) deposits to attract dollars from NRIs. According to HDFC Bank’s most recent rate card, effective June 10, 2026, interest rates on Foreign Currency Non-Resident (FCNR) deposits have been dramatically boosted, with rates for tenures of three to five years and above rising to 6 percent.
The change represents a significant rise of 235 basis points over the 3.65 percent rate available until June 9 for identical tenures.
The private-sector lender will now offer 6% on all FCNR(B) deposits of 3 years to 5 years. The current US yield is around 4.5% for three years, giving NRIs an extra 2–2.5% to earn on their funds by parking money in FCNR(B) deposits instead.
What is the RBI scheme?
In May, the RBI announced a US Dollar-Rupee Forex Swap Facility for fresh FCNR(B) deposits raised by banks. Under this facility, banks can raise NRI deposits with a minimum tenor of three years and a maximum of five years. The scheme is valid until September 30, 2026, and deposits are subject to a one-year lock-in period.
The facility effectively removes currency risk for banks. RBI is offering banks currency risk insurance by allowing them to exchange NRI foreign deposits for rupees at the current rate, then requiring them to repurchase the same amount at a pre-set rate at maturity — meaning any depreciation of the rupee in between is absorbed by RBI, not the bank.
In essence, RBI is helping banks manage currency risks caused by the rapid depreciation of the INR, enabling them to attract NRI dollar deposits through higher interest rates on FCNR(B) deposits and bring essential foreign exchange into India.
What are FCNR(B) deposits?
FCNR(B) deposits are different from NRE or NRO accounts in that they are held in foreign currency. This means the deposit amount and interest are both denominated in the foreign currency — protecting NRIs from rupee depreciation. The proceeds can be fully repatriated, and interest earned is not subject to income tax in India. Interest is payable either semi-annually or at maturity in the deposit currency. FCNR accounts may be jointly held by NRIs or with resident close relatives, and they come with a nomination facility.
Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. Data and estimates cited are sourced from publicly available reports and statements. Interest rates and scheme terms are subject to change as per RBI guidelines. For rates, visit the bank’s website, as rates can change without notice. Readers are advised to consult a qualified financial advisor before making any investment decisions.