NRI Dollar Deposits: Are You Earning 5.5% Yet?

Several Indian banks have sharply raised interest rates on FCNR(B) USD deposits following an RBI move. If you are an NRI parking dollars in India, you could earn meaningfully higher returns than before — here is what to know.

Here's what happened: RBI's forex swap operations injected liquidity and prompted Indian banks to raise FCNR(B) USD deposit rates to attract more foreign currency.. Banks including major private and public sector lenders have revised dollar deposit rates upward, with some offering around 5–5.5% per annum on USD FCNR(B) accounts.. FCNR(B) deposits are fully repatriable, held in foreign currency, and protected from exchange rate risk — making higher rates especially attractive for NRIs..

What you should do: Compare the latest FCNR(B) USD rates across HDFC Bank, PNB, AU Small Finance Bank and Karur Vysya Bank before opening or renewing a deposit.. Check the deposit tenure that gives you the best rate — most banks offer tiered rates for 1-year, 2-year and 5-year terms, so match the tenure to your repatriation needs.. Confirm the total return after TDS rules: FCNR(B) interest is exempt from Indian income tax, so ensure your bank is not deducting tax incorrectly before you lock in..

FCNR(B) deposits are denominated in USD so you bear zero rupee-dollar exchange risk — your principal and interest are both returned in dollars, making them far safer than NRE FDs during rupee weakness.