FCNR(B) Deposits: Are NRI Returns Worth It in 2025?

RBI is keeping its special dollar-swap facility open to attract NRI deposits. If you have a family member abroad, FCNR(B) deposits can earn higher interest with zero rupee risk — here's what that actually means for your family's money.

Here's what happened: RBI confirmed it has no plans to shut its concessional swap window for FCNR(B) deposits before the current deadline, signalling continued support for NRI inflows.. The swap facility reduces hedging costs for banks, allowing them to offer NRI depositors more competitive interest rates on foreign currency deposits.. RBI expects FCNR(B) deposit inflows to remain strong, helping India build its foreign exchange reserves and stabilise the rupee..

What you should do: Ask your NRI family member to compare FCNR(B) rates across SBI, HDFC Bank, and ICICI Bank — rates vary by currency (USD, GBP, CAD) and tenure from 1 to 5 years.. Check whether their existing NRE fixed deposits can be converted or reinvested into FCNR(B) at maturity — same tax-free interest benefit, but with added currency protection.. Confirm the deposit tenure carefully: FCNR(B) locks in currency rates at the time of opening, so choosing a 3–5 year tenure when the rupee is weak can lock in a favourable conversion on return..

Interest earned on FCNR(B) deposits is completely tax-free in India for the NRI account holder — unlike regular fixed deposits, no TDS is deducted at source.