NRI Deposits Hit 7.13%: Is Your Dollar Idle?

Ujjivan Small Finance Bank has raised interest rates on NRI dollar deposits to 7.13% per year. If you or your family member living abroad keeps dollars in an Indian bank account, this is a good time to review where those funds are parked.

Here's what happened: Ujjivan Small Finance Bank raised NRI foreign currency deposit rates to 7.13% per annum, one of the more competitive rates in the market right now.. RBI has been encouraging banks to attract more dollar inflows from the Indian diaspora to support the rupee and boost India's foreign exchange reserves.. NRIs can park foreign currency in FCNR(B) accounts — these deposits are held in dollars or other currencies and are fully repatriable with no currency conversion risk at the time of deposit..

What you should do: Compare FCNR(B) rates across banks — SBI, HDFC, ICICI, and small finance banks often differ by 0.5–1%, which adds up on large NRI deposits.. Check if your NRI relative has idle dollars in a low-interest overseas savings account — moving funds to an FCNR(B) at 7%+ could meaningfully improve returns.. Ask your bank about the lock-in period and premature withdrawal penalty before opening an FCNR(B) deposit, as breaking it early can reduce your effective yield significantly..

FCNR(B) deposits are exempt from Indian income tax on interest — NRIs pay zero tax in India on these earnings, making the effective yield even better than it looks.