Some smaller banks offer more than 7.4% on selected dollar-denominated FCNR(B) deposits
MUMBAI, July 29, 2026: Competition for overseas Indian savings has intensified as several Indian banks raise interest rates on Foreign Currency Non-Resident (Bank), or FCNR(B), deposits.
AU Small Finance Bank increased the annual rate on selected three-to-four-year US-dollar FCNR(B) deposits from 7.10% to 7.40%, effective July 27. The actual rate varies according to the deposit’s currency and maturity period.
Ujjivan Small Finance Bank has offered an annual rate of 7.50% on eligible three-to-five-year US-dollar FCNR(B) deposits since July 2. Equitas Small Finance Bank was reported to be offering as much as 7.52% on selected deposits.
FCNR(B) accounts allow eligible NRIs to hold fixed deposits in foreign currencies rather than converting their money into Indian rupees. Because the deposit and repayment are maintained in the selected currency, depositors have greater protection from rupee-exchange-rate fluctuations.
Principal and interest are generally repatriable, while interest earned by eligible non-residents is ordinarily exempt from income tax in India. Tax may still be payable in the depositor’s country of residence.
The higher rates follow measures intended to encourage longer-term foreign-currency inflows into India. Smaller banks are relying mainly on competitive headline rates, while several larger institutions are promoting structured or leveraged products.
NRIs should not compare offers solely by interest rate. The applicable tenure, early-withdrawal penalty, lock-in period, foreign tax liability and strength of the financial institution should also be examined. Leveraged deposit products can magnify returns but may expose customers to additional borrowing, currency and market risks.
Rates can change without advance notice. Customers should confirm the terms directly with the bank before transferring funds.
