State Bank of India (SBI), Bank of Baroda and ICICI Bank have revised their Foreign Currency Non-Resident FCNR(B) interest rates on deposits from Non-Resident Indians (NRIs) under the recently announced RBI’s swap facility on foreign deposits.

Some other banks like HDFC, PNB, AU Small Finance Bank, amongst others, have already announced new, higher rates on their FCNR (B) deposits. With US yields at 4.25%- 4.5% for three years, NRIs parking funds in Indian banks’ FCNR(B) deposits can earn an additional rate of around 2%.

Currently, Karur Vysya Bank is offering the highest rate of 7% on US dollar FCNR(B) deposits for any tenure between three and five years. Important to note is that banks may revise rates anytime before September 30, depending on the mobilization of funds under this scheme.

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How it works

On May 8, RBI announced a US Dollar-Rupee Forex Swap Facility for newly raised FCNR(B) deposits by banks, with a minimum tenure of 3 years and a maximum term of 5 years, effective until September 30, 2026.

The RBI provides currency risk insurance to banks by enabling them to exchange NRI foreign deposits for rupees at the current rate and then requiring them to repurchase the same amount at a predetermined rate upon maturity, implying that any rupee depreciation in the meantime is absorbed by the RBI rather than the bank.

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Effectively, 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.

For NRIs, 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.

SBI FCNR(B) deposit rates

Effective June 10, SBI FCNR(B) deposit rates for 3 years and above but less than 4 years is 5.25%, while for 4 years and above but less than 5 years, it is 5.5%. On deposits for 5 years, the rate is set at 5.75%. These rates are for deposits of up to USD 1 Million. For deposits above USD 1 million, there is an additional rate of 0.25% across respective tenures. No premature withdrawal is permitted under the scheme for a period of 1 year from the date of opening of FCNR(B) deposit, and interest is compounded at half-yearly frequency.

Yes Bank

Effective June 11, Yes Bank FCNR(B) deposit rates for 3 years and above but less than 4 years is 6.5%, while for 4 years and above but less than 5 years, it is 6.55%. On deposits for 5 years, the rate is set at 6.6%.

ICICI Bank

ICICI Bank is offering 6% across all tenures between 3 years and 5 years on their FNCR (B) deposits, effective June 11.

Bank of Baroda

Under the new FCNR (B) Deposit Scheme, Bank of Baroda is offering higher interest rates for deposits in the 3 to 5 year maturity bucket across major foreign currencies, including the US Dollar (USD), British Pound Sterling (GBP), Euro, Australian Dollar (AUD) and Canadian Dollar (CAD). NRIs can now earn up to 6.00% on USD deposits, 4.75% on GBP and AUD deposits, 5.15% on CAD deposits and 3.75% on Euro deposits.

Effective June 11, Bank of Baroda FCNR(B) deposit rates for 3 years and above but less than 4 years is 5.50%, while for 4 years and above but less than 5 years it is 5.75%. On deposits for 5 years, the rate is set at 6%.

HDFC Bank

Earlier, HDFC Bank revised the FCNR (B) rates by offering 6% on dollar deposits of NRIs. AU Small Finance Bank has also increased FCNR deposit rates from 5.15% to 7.10% per annum on 3-year but less than 4-year deposits. For 4 years and above, the rate is set at 7%.

Punjab National Bank has also revised its FCNR(B) deposit rates, which is 6% for deposits of up to $1 million for a three-year tenure. For deposits for 3 to 4 years, the rate will be 6.05%, and it will be 6.10% on deposits for 4 to 5 years.

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.