NRI Deposits Hit 7.13%: Is Your Dollar Earning Enough?

Ujjivan Small Finance Bank has raised NRI dollar deposit rates to 7.13% per year. If you have family abroad or hold FCNR accounts, this rate shift could mean more rupees coming home. Here is what you need to know.

Here's what happened: Ujjivan Small Finance Bank raised interest rates on NRI foreign currency deposits to 7.13% per annum, one of the higher rates in this segment.. The RBI recently relaxed norms on FCNR(B) and NRE deposits to encourage more foreign currency inflows into India amid global economic uncertainty.. Several banks have been quietly revising NRI deposit rates upward — making this a competitive window for Indian diaspora to park dollar savings in India..

What you should do: Compare FCNR(B) and NRE fixed deposit rates across at least 3 banks — SBI, HDFC Bank, and small finance banks — before locking in any amount.. Check if your NRI family member's existing FCNR deposit is up for renewal — this is the right moment to renegotiate for a higher rate.. Consult a tax advisor: FCNR(B) deposit interest is fully tax-free in India for NRIs, making it more attractive than it appears on paper..

FCNR(B) deposits are kept in foreign currency and repaid in foreign currency — so your principal is fully protected from rupee depreciation risk, unlike NRE accounts.