There is good news for NRIs and people holding savings in foreign currency. India’s two largest public sector banks, SBI and Bank of Baroda, have increased interest rates on FCNR(B) deposits.
With the revised rates, customers can now earn up to 6% interest on select foreign currency deposits.
The move comes after recent steps taken by the Reserve Bank of India (RBI) to encourage foreign currency inflows into the country.
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SBI Launches New FCNR(B) Advantage Deposit Scheme
SBI has introduced a new FCNR(B) Advantage Deposit Scheme for its customers.
Under the scheme:
Deposits up to $1 million will earn 5.25% interest for 3–4 years
5.50% interest for 4–5 years
5.75% interest for 5 years
For deposits above $1 million, SBI is offering up to 6% interest for a 5-year tenure.
The bank aims to attract more foreign currency deposits by offering higher returns to customers.
Bank of Baroda Also Revises FCNR Rates
Bank of Baroda has also increased interest rates on its FCNR(B) deposits across multiple foreign currencies.
The revised rates include:
Up to 6% interest on US Dollar deposits
Up to 5.15% on Canadian Dollar deposits
Up to 4.75% on British Pound deposits
Up to 4.75% on Australian Dollar deposits
The bank said the changes follow RBI’s recent relaxation of certain rules related to FCNR(B) deposits and overseas borrowing.
Know the Premature Withdrawal Rules
Before investing, customers should also understand the withdrawal conditions.
According to SBI, FCNR(B) deposits cannot be withdrawn during the first year.
If the deposit is withdrawn after one year but before three years, interest will be paid at 3.50%.
For withdrawals made between three and five years, the applicable interest rate will be reduced by 1%.
Why This Matters
With higher interest rates now available, FCNR(B) deposits have become more attractive for NRIs and investors holding foreign currency savings.
For those looking to earn better returns while keeping money in foreign currency, the latest rate hike could be a good opportunity.