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RBI announces new FCNR rules for NRI deposits. Read our explainer to learn what changed, who may benefit, and the key rates that different banks offer.
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Evidence tier: A1 Evidence type: Auto-discovered official publication Source: Wise Blog Official publication date: 2026-08-21 Captured: 2026-08-30T12:34:29.547Z
If you're an NRI with USD savings, you may be wondering where to keep that money to earn a solid return without exposing you to currency risk. Foreign Currency Non-Resident (FCNR) deposits are a popular answer, and right now they're paying more than they have in years.
The Reserve Bank of India (RBI) recently opened a special window that pushed FCNR interest rates on USD deposits up to around 6% to 6.75%. That window closes on 31st of August 2026, so there's only a short time left to lock in these rates.¹
In this guide, we'll cover what FCNR deposits are, what the new rules mean, and how to make the most of them before the deadline.
We’ll also introduce the Wise account which allows you to send USD to India via Swift at the fair mid-market rate.
<table><thead><tr><th>Table of contents</th></tr></thead><tbody><tr><td><ul><li><a href="https://wise.com/us/blog/fcnr-deposits-for-us-based-nris#fcnr-deposits-explained">FCNR deposits explained</a></li><li><a href="https://wise.com/us/blog/fcnr-deposits-for-us-based-nris#how-the-rbis-temporary-fcnrb-facility-works">How the RBI’s temporary FCNR(B) facility works</a></li><li><a href="https://wise.com/us/blog/fcnr-deposits-for-us-based-nris#fcnr-interest-rates-comparison-table">FCNR interest rates comparison table</a></li><li><a href="https://wise.com/us/blog/fcnr-deposits-for-us-based-nris#send-usd-to-india-the-smart-way-with-wise">Send USD to India the smart way with Wise</a></li><li><a href="https://wise.com/us/blog/fcnr-deposits-for-us-based-nris#frequently-asked-questions">Frequently asked questions</a></li></ul></td></tr></tbody></table>Disclaimer: This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise US Inc. or its affiliates, and it is not intended as a substitute for obtaining advice from an immigration attorney or any other professional.
FCNR stands for Foreign Currency Non-Resident. An FCNR deposit is a fixed deposit you hold with an Indian bank, but in foreign currency instead of INR.
These deposits are appealing because:
That said, if you're in the US, the interest is tax-free in India. However, you still need to speak with the tax professional to understand how much tax you need to pay in the US.
<table><thead><tr><th>💡 FCNR deposits run for a fixed term, usually between <strong>1 and 5 years</strong>.² You agree on the interest rate when you open the deposit, and it stays the same for the whole term.</th></tr></thead><tbody></tbody></table>FCNR deposits are open to:
If you're an Indian citizen living and working in the US, or you hold OCI status, you can open one. However, you'll usually need an NRI account with the bank first.
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](https://wise.com/us/send-money/send-money-by-swift)
In June 2026, the RBI introduced a new set of rules to attract more foreign currency into India.³ The result is higher interest rates on FCNR deposits than NRIs have seen in years.
FCNR offers higher interest rates on USD deposits, depending on the bank and the term.¹ ³
Other currencies such as GBP, EUR, AUD, and CAD are also available, and several banks offer competitive rates on these too, though USD remains the most popular choice for US-based NRIs.
You need to open or renew your FCNR deposit between 8 June and and 31st of August 2026 to qualify for these rates. Once it's open, your deposit is locked in for at least 1 year, so you can't withdraw the money during the first 12 months.³⁴
After the first year, some banks let you withdraw early without a penalty, but many only allow it at their discretion. Make sure to check your bank's terms before you commit.
Normally, banks have to pay to protect themselves against currency swings when they take in foreign-currency deposits. This cost is called hedging, and it eats into the interest they can offer you.
Under the new rules, the RBI takes on that hedging cost for FCNR deposits of 3 to 5 years. With that expense gone, banks can pass the savings on to you as a higher interest rate.
This applies most strongly to USD, but several banks are now offering competitive rates on other currencies like GBP and AUD, too.
Here's an example:
Say you open a 5-year USD FCNR deposit of 100,000 USD.
At an old rate of around 3.5%, you'd earn roughly 18,800 USD in interest over 5 years. At a new rate of 6.25%, you'd earn roughly 35,400 USD over the same period.
That's a difference of over 16,000 USD on the same deposit.
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](https://wise.com/us/send-money/send-money-by-swift)
Rates vary by bank, currency, and your term.
Here's how the highest 5-year FCNR rates compare across some of India's leading banks, as of early August 2026. Rates shown are the highest on offer for each currency, and availability varies by term.
<table><thead><tr><th>Bank</th><th>USD</th><th>GBP</th><th>EUR</th><th>AUD</th><th>CAD</th></tr></thead><tbody><tr><td>IDFC First Bank⁵</td><td>6.75%</td><td>NA</td><td>NA</td><td>NA</td><td>NA</td></tr><tr><td>Federal Bank⁶</td><td>6.25%</td><td>6.15%</td><td>4.60%</td><td>6.50%</td><td>2.25%</td></tr><tr><td>ICICI Bank⁷</td><td>6.25%</td><td>5.90%</td><td>NA</td><td>6.25%</td><td>4.50%</td></tr><tr><td>HDFC Bank⁸</td><td>6.25%</td><td>5.90%</td><td>4.55%</td><td>6.25%</td><td>4.50%</td></tr><tr><td>State Bank of India⁹</td><td>6%</td><td>NA</td><td>NA</td><td>NA</td><td>NA</td></tr><tr><td>Kotak Mahindra Bank¹⁰</td><td>6.30%</td><td>NA</td><td>NA</td><td>NA</td><td>NA</td></tr><tr><td>Yes Bank¹¹</td><td>6.60%</td><td>6.70%</td><td>4.75%</td><td>3.35%</td><td>2.25%</td></tr><tr><td>Indian Bank¹²</td><td>3.40%</td><td>2.70%</td><td>1.50%</td><td>2.45%</td><td>3%</td></tr><tr><td>Punjab National Bank¹³</td><td>6.40%</td><td>6.40%</td><td>4.90%</td><td>5.40%</td><td>4.80%</td></tr><tr><td>IndusInd Bank¹⁴</td><td>6.75%</td><td>6.65%</td><td>0.01%</td><td>0.01%</td><td>0.01%</td></tr></tbody></table>Some smaller banks are offering even more. AU Small Finance Bank, for example, has advertised USD rates as high as 7.40%.¹⁵
<table><thead><tr><th>💡 Rates can change at short notice, so always confirm the current figure with your bank before you open a deposit.</th></tr></thead><tbody></tbody></table>The highest rate isn't always the best choice. Make sure to think about:
- Rate vs. bank size: Smaller banks often dangle the highest rates but carry more risk, and since India's deposit insurance only covers up to 500,000 INR (roughly 5,000 USD) per depositor per bank, a large deposit leans mostly on the bank staying solvent¹⁶
- Whether you already bank there: If you already hold an NRI account with a bank, opening an FCNR deposit with the same one is usually faster and simpler
- Withdrawal terms: Banks differ on what happens after the one-year lock-in, so make sure you know what happens if you need the money early
It may also be worth consulting with a financial advisor to figure out the best option for you.
To open an FCNR deposit, you'll need to move your money from the US to your bank in India. If you do that through a bank, a chunk can disappear into transfer fees and exchange rate markups.
Wise sends your USD to India at the mid-market exchange rate, the same rate you see on Google, with a clear upfront fee and no hidden markup.
You'll also see where your money is at every step with Wise's tracking, which gives you more peace of mind with a large transfer.
Plus, if you're moving more than 25,000 USD, you may qualify for a lower rate on the amount. And if you refer a friend to Wise, you both may be eligible to earn a little cash on the side.
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](https://wise.com/us/send-money/send-money-by-swift)
Not during the first year. Deposits opened under the current rules come with a mandatory one-year lock-in, so you can't withdraw the money in the first 12 months.⁴ After that, some banks let you withdraw early with no penalty, but not all.
IDFC First and IndusInd offer some of the highest USD rates at 6.75%, followed by Yes Bank at 6.60%, PNB at 6.40%, and Kotak at 6.30%. Some smaller banks advertise more, such as AU Small Finance Bank at up to 7.40%.⁵¹⁰¹¹¹³¹⁴¹⁵
Rates change often, so confirm the latest figure with the bank.
Most banks let you open an FCNR deposit in major currencies including USD, GBP, EUR, CAD, and AUD. This varies from bank to bank.
However, for US-based NRIs, USD is the most common and convenient choice, though some banks offer strong rates on GBP and AUD as well.
[
](https://wise.com/us/send-money/send-money-by-swift)
FCNR deposits give US-based NRIs a way to earn a strong, fixed return on their USD while avoiding currency risks, and the current rates of around 6% to 7% are the highest they've been in years.
However, you'll need to open your deposit by 31 August 2026 to lock in these rates.¹
Sources
Sources checked 08/21/2026
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