FCNR Deposits at 6%: Is Your NRI Money Working Hard?

Indian banks including SBI, HDFC, ICICI, and Central Bank of India have revised FCNR(B) deposit rates upward. The government is also covering hedging costs on 3-5 year deposits, making these accounts more attractive for NRIs parking foreign currency savings in India.

Here's what happened: Multiple major Indian banks have updated FCNR(B) deposit interest rates, with Central Bank of India offering up to 6% on foreign currency deposits.. The Indian government announced it will cover hedging costs for new FCNR(B) deposits with a 3 to 5 year tenure, reducing risk for NRI depositors.. FCNR(B) accounts let NRIs hold deposits in foreign currencies like USD, GBP, or EUR in Indian banks, with returns paid in the same currency — no rupee conversion risk..

What you should do: Compare FCNR(B) rates across SBI, HDFC Bank, ICICI Bank, PNB, and Central Bank of India before opening or renewing a deposit.. Check whether your existing FCNR deposit tenure qualifies for the government's hedging cost coverage — focus on the 3-5 year bracket.. Consult a tax advisor: FCNR(B) interest is fully tax-free in India, but your country of residence may tax it — confirm before investing..

FCNR(B) deposits are completely exempt from Indian income tax AND wealth tax. If you are an NRI, this is one of the few truly tax-free, currency-protected savings options available in India.