FCNR(B) FDs: Lock NRI Rates Before Aug 31 Deadline

NRIs can deposit foreign currency in Indian banks via FCNR(B) accounts and earn high interest. A government hedging support scheme ending August 31 is pushing banks to offer elevated rates right now — but the window is closing fast.

Here's what happened: The government is currently absorbing hedging costs on FCNR(B) deposits, enabling banks to offer NRIs higher-than-usual foreign currency interest rates until August 31, 2025.. Major PSU and private banks — including those with large NRI customer bases — are quoting elevated rates on USD, GBP, EUR, and other permitted currencies across 1-to-5-year tenors.. Once the hedging support window closes, banks will bear their own currency-risk hedging costs, which is expected to push FCNR(B) rates lower across the board..

What you should do: Compare FCNR(B) rates across at least 3 banks right now — PSU banks and private banks are both competitive; even a 0.25% difference on ₹50L adds up to ₹1.25 lakh over 5 years.. Lock in a 3-to-5 year FCNR(B) FD before August 31 if you hold idle USD, GBP, or EUR abroad — the government hedging support ends on that date and rates are unlikely to stay this high.. Confirm your NRI/NRE tax status with your CA before booking — FCNR(B) interest is tax-exempt in India for NRIs, but repatriation rules and home-country tax treatment vary by country of residence..

FCNR(B) deposits can be used as collateral for a rupee loan in India — so NRI family members can fund a home purchase locally without breaking the deposit early.

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