NRI Dollar Deposits: Earn 6.25% — Is It Worth It?

Bank of Baroda has launched a new FCNR(B) scheme for NRIs offering up to 6.25% per year on US dollar deposits. These deposits are tax-free in India and protected from rupee depreciation — making them worth a close look for Indians living abroad.

Here's what happened: Bank of Baroda launched a new FCNR(B) deposit scheme offering up to 6.25% per annum on US dollar-denominated fixed deposits for NRIs.. FCNR(B) deposits are maintained in foreign currency, so your principal and interest are fully protected from Indian rupee depreciation risk.. Interest earned on FCNR(B) deposits is completely tax-free in India under the Income Tax Act, with no TDS deducted at source..

What you should do: Compare this 6.25% FCNR(B) rate against your current US savings account or money market fund rate before deciding where to park idle dollars.. Check the minimum deposit tenure — FCNR(B) deposits run from 1 to 5 years, so plan your liquidity needs before locking in funds.. Consult a tax advisor in your country of residence — while FCNR interest is tax-free in India, it may still be taxable in the US, UK, or UAE under local laws..

FCNR(B) deposits can be used as collateral for loans in India — so your NRI family member can pledge your deposit to fund a home purchase without you breaking the FD.