FCNR(B) Deposits: Are NRIs Getting 8.5% Tax-Free?

Indian banks are offering unusually high interest rates on FCNR(B) deposits to attract dollars from NRIs abroad. If you or your family member lives overseas, this could be a smart, tax-free way to park foreign earnings in India right now.

Here's what happened: Indian banks are aggressively raising interest rates on FCNR(B) deposits to attract foreign currency inflows from NRIs worldwide.. FCNR(B) accounts let NRIs deposit money in foreign currencies like USD, GBP, or EUR — interest and principal are fully repatriable.. Some lenders are also offering leverage on these deposits, allowing NRIs to borrow against them — amplifying both returns and risk..

What you should do: Compare FCNR(B) rates across SBI, HDFC Bank, ICICI Bank, and axis-bank" class="text-primary font-semibold hover:underline">Axis Bank — rates vary significantly right now, so shop around before committing.. Check the currency risk carefully — FCNR(B) deposits are held in foreign currency, so exchange rate movements affect your effective rupee return when you repatriate.. If you have a family member abroad, discuss whether moving idle foreign savings into a FCNR(B) deposit makes sense before rates normalise..

FCNR(B) interest earned is completely tax-free in India for the NRI depositor — but check your country of residence's tax rules, as some nations tax global income.