NRI with US dollars? You can now earn up to 7.52% on FCNR deposits

Equitas Small Finance Bank (SFB) has revised its Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit rates for US dollar deposits, offering up to 7.52 per cent annually for deposits of USD 10,000 and above with tenures between 36 months and less than 60 months.

The revised rates make Equitas one of the highest-paying banks in the FCNR(B) space after the Reserve Bank of India’s recent measures to encourage foreign currency inflows by relaxing interest rate norms on such deposits until September 30, 2026.

For deposits below $10,000, the bank is offering 7.13 per cent for the same maturity buckets.

How does Equitas compare with other small finance banks?

Among small finance banks, Ujjivan Small Finance Bank is the closest competitor. The lender recently revised its USD FCNR(B) deposit rate to 7.50 per cent per annum for deposits with maturities between three and five years, marginally below Equitas’ top rate of 7.52 per cent.

AU Small Finance Bank currently offers up to 7.10 per cent on USD FCNR(B) deposits for three-year maturities and 7 per cent for four- and five-year deposits.

How do large banks compare?

Large private and public sector banks continue to trail small finance banks on FCNR(B) rates.

HDFC Bank and State Bank of India (SBI) currently offer up to around 6 per cent on comparable USD FCNR(B) deposits, while several other lenders have revised rates upward following the RBI’s policy move but remain below the 7 per cent mark.

Rates vary by deposit size, tenure and scheme.

HDFC Bank currently offers up to 6 per cent on USD FCNR deposits with maturities between three and five years.

State Bank of India offers up to 6 per cent under its Advantage FCNR(B) scheme for larger deposits, while its standard FCNR(B) rates for similar tenures remain lower.

Meanwhile, AU Small Finance Bank and Yes Bank have revised rates to around 7-7.1 per cent following the RBI’s relaxation.

Why are banks increasing FCNR(B) rates?

Banks have been raising FCNR(B) deposit rates after the RBI eased regulations on fresh FCNR(B) deposits with maturities between three and five years until September 30, 2026. The move is aimed at attracting foreign currency deposits from NRIs, strengthening banks’ foreign currency resources and supporting the country’s external sector.

The higher rates have triggered intense competition among lenders, particularly small finance banks, which are using attractive yields to attract NRI deposits.

What are FCNR(B) deposits?

FCNR(B) deposits allow NRIs to keep their savings in foreign currencies such as the US dollar, pound sterling, euro, Japanese yen, Australian dollar and Canadian dollar.

Unlike NRE fixed deposits, both the principal and interest remain denominated in the foreign currency, shielding depositors from rupee depreciation. For eligible NRIs, the interest earned on FCNR(B) deposits is also exempt from income tax in India, making them an attractive option for those looking to earn dollar-denominated returns without taking currency risk.

With a top rate of 7.52 per cent, Equitas Small Finance Bank is now offering one of the most competitive USD FCNR(B) returns in the market, narrowly ahead of Ujjivan Small Finance Bank and comfortably above AU Small Finance Bank and most large lenders.