RBI Lifts NRE Rate Cap: Is Your NRI Deposit Missing Out?
RBI has temporarily removed the interest rate ceiling on NRE and FCNR(B) deposits until September 2026. This means banks can now offer higher returns to NRIs, making it a good time to open or renew these accounts before the window closes.
A ₹50L NRE FD at 9.5% earns ₹4.75L/year — tax-free in India
Your NRE/FCNR deposit could earn this much more starting now
Key Takeaways
Compare NRE and FCNR(B) rates across at least 3-4 banks — SBI, HDFC, ICICI, and small finance banks — before locking in a deposit, as rates now vary widely.
Book longer tenors (2-3 years) before September 30, 2026 to lock in the higher rates even if RBI reimpose the cap after the deadline.
Check with your bank whether existing NRE FDs can be prematurely closed and renewed at the new higher rate — the math may still work in your favour.
RBI has temporarily removed the interest rate ceiling on NRE and FCNR(B) deposits until September 2026. This means banks can now offer higher returns to NRIs, making it a good time to open or renew these accounts before the window closes.
Here's what happened: RBI has lifted the interest rate cap on NRE savings and FCNR(B) fixed deposits, letting banks set competitive rates freely until September 30, 2026.. The move is designed to attract more foreign currency into India, helping stabilise the rupee and boost forex reserves during global uncertainty.. NRE deposit interest is fully tax-free in India — both the principal and interest earned are exempt from Indian income tax for NRI account holders..
What you should do: Compare NRE and FCNR(B) rates across at least 3-4 banks — SBI, HDFC, ICICI, and small finance banks — before locking in a deposit, as rates now vary widely.. Book longer tenors (2-3 years) before September 30, 2026 to lock in the higher rates even if RBI reimpose the cap after the deadline.. Check with your bank whether existing NRE FDs can be prematurely closed and renewed at the new higher rate — the math may still work in your favour..
FCNR(B) deposits are held in foreign currency (USD, GBP, EUR), so you avoid rupee depreciation risk entirely — your maturity amount is guaranteed in the currency you deposited.
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- [1]“How NRIs, OCIs may benefit as RBI allows banks to offer higher interest rates on certain FCNRs, NREs” Wealth-Economic Times · 17 Jun 2026
This article is reported by GoCredit's Editorial Team based on the source above. GoCredit synthesises, contextualises, and adds India-borrower-relevant analysis. We are not the original publisher.