There is good news for Non-Resident Indians (NRIs) looking to earn better returns on their savings. Two major private sector banks, ICICI Bank
and Axis Bank, have increased interest rates on their Foreign Currency Non-Resident (FCNR-B) deposit schemes.
Both banks are now offering up to 6% interest on FCNR(B) deposits with tenures ranging from 3 to 5 years. The move is aimed at attracting more foreign currency deposits from NRIs.
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ICICI Bank and Axis Bank Offer 6% Interest
ICICI Bank has raised the interest rate on FCNR(B) deposits with a 3- to 5-year tenure by 3.1 percentage points. After the revision, customers can now earn 6% interest on these deposits.
Axis Bank has also revised its rates for the same tenure. The bank increased the interest rate by 3.05 percentage points and now offers 6% interest on FCNR(B) deposits held for 3 to 5 years.
The rate hike comes as banks compete to attract more foreign currency deposits into the Indian banking system.
Why Have Banks Increased FCNR Rates?
Banks are trying to encourage NRIs to keep more of their foreign currency savings in India. As competition for dollar and other foreign currency deposits grows, many banks are making their FCNR schemes more attractive by offering higher returns.
The latest rate hike is expected to draw more NRI investors looking for safe and rewarding deposit options.
What Is an FCNR(B) Account?
An FCNR(B) account allows NRIs to deposit and maintain funds in foreign currencies such as US dollars, pounds, euros, and others.
One of the biggest benefits of these accounts is that depositors are protected from currency exchange rate fluctuations. This means investors do not have to worry about losses caused by changes in the value of the rupee.
With interest rates now reaching 6%, FCNR(B) deposits have become an even more attractive investment option for NRIs.
More Banks May Follow
If other leading banks introduce similar rate hikes, India could see a rise in foreign currency deposits in the coming months.
Higher inflows of foreign currency deposits can also help strengthen the foreign currency liquidity available in the Indian banking system, providing additional support to the banking sector.