What is an FCNR Deposit? A complete guide for NRIs
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If you’re an NRI earning in a foreign currency — whether that’s Singapore dollars, UAE dirhams, or US dollars — you’ve probably asked yourself where the safest place to park those savings is. One structure now stands out: the FCNR deposit, currently paying up to 7.10% interest on USD balances at Indian banks thanks to a new RBI incentive.
The Reserve Bank of India opened a special swap window on June 8, 2026, making it significantly cheaper for banks to offer higher rates on FCNR deposits. Within days, banks responded — AU Small Finance Bank is now offering 7.10% on USD deposits, and major banks like ICICI, HDFC, and SBI are at 6%. That’s roughly double what you’d earn on a fixed deposit at a local Singapore bank. The window is open until September 30, 2026.
This guide covers how FCNR deposits work, current interest rates of up to 7.10%, and how NRIs — in Singapore and beyond — can open one before the RBI’s swap window closes on September 30, 2026.
What is an FCNR Deposit?
FCNR stands for Foreign Currency Non-Resident (Bank) deposit. An FCNR deposit is a type of term deposit offered by Indian banks specifically to NRIs and PIOs (Persons of Indian Origin) that lets you deposit money in a foreign currency and earn interest on it — without ever converting to Indian rupees.
Unlike a regular Indian fixed deposit, your money stays in the currency you deposited it in. So if you put in USD 10,000, you get back USD 10,000 plus interest in USD. No INR conversion, no exchange rate risk on the principal.
Quick definition
An FCNR (B) deposit is a fixed-term bank deposit held in foreign currency by an NRI at an authorised Indian bank. The principal and interest are both denominated in the original foreign currency and are freely repatriable.
If an NRE fixed deposit is also on your shortlist, the comparison later in this guide breaks down how the returns differ.
Which Currencies Are Accepted?
Indian banks accept FCNR deposits in the following currencies:
- US Dollar (USD)
- Pound Sterling (GBP)
- Euro (EUR)
- Japanese Yen (JPY)
- Australian Dollar (AUD)
- Canadian Dollar (CAD)
- Singapore Dollar (SGD)
USD deposits are the most common, especially among NRIs in the US who earn in dollars. SGD is popular among Singapore-based NRIs.
What Interest Rates Can You Earn?
As of June 2026, following the RBI’s decision to raise the interest rate ceiling on FCNR deposits, selected Indian banks are offering the following on 3–5 year USD deposits:
| Bank | Peak USD rate (3–5yr) | Notes |
|---|---|---|
| AU Small Finance Bank | 7.10% | Highest in market; eff. June 10, 2026 |
| CSB Bank | 6.95% | 3yr to <4yr tenor |
| Yes Bank | 6.60% | 5yr tenor; 6.50–6.55% for 3–4yr |
| ICICI Bank | 6.50% | Eff. June 11, 2026 |
| HDFC / SBI / Axis / Kotak | 6.00% | Kotak offers 6.15% for deposits >$1M |
| DBS Singapore (SGD FD) | 3.49% | For comparison — local Singapore rate |
Source: Bank websites and press releases, June 2026. Rates for 3–5yr USD FCNR deposits under RBI swap window scheme. Subject to change. Interest rates are determined by individual banks and may vary by currency and tenure. Please check with your bank for the latest applicable rates.
If you’re an EP holder in Singapore, FCNR rates of up to 7.10% are more than double the ~3% typical local fixed deposit rate — and the window to lock in these rates closes September 30, 2026.
Time-limited window
The RBI’s special swap facility — which is what’s enabling banks to offer these elevated rates — is only available for deposits opened between June 8 and September 30, 2026. After that, rates are likely to drop back. If you’re planning to open an FCNR deposit, don’t wait until late September.
Is the Interest Taxable?
The interest earned is completely tax-free in India for NRIs. No TDS (Tax Deducted at Source) is deducted. Depending on your country of residence, you may need to declare the interest locally — Singapore NRIs are generally not taxed on foreign-sourced interest, but verify with a NRI tax rules resource or a tax advisor.
What Are the Tenor Options?
FCNR deposits are available for tenors between 1 year and 5 years. However, the elevated rates under the current RBI swap window are specifically for 3–5 year deposits, with a mandatory 1-year lock-in from the date of opening. If you’re looking at shorter tenors (1–2 years), rates will be lower — check with your bank for their current 1-year USD rate.
The scheme window closes September 30, 2026. Deposits must be opened before this date to qualify for the RBI swap facility and the higher rates that come with it.
Who Can Open an FCNR Deposit?
Any NRI or PIO who holds a valid NRE or FCNR account with an authorised Indian bank can open one. This includes:
- NRIs in Singapore, Malaysia, and other Southeast Asian countries
- NRIs in Gulf Cooperation Council (GCC) countries — UAE, Saudi Arabia, Qatar, Bahrain, Kuwait, Oman
- NRIs in the UK, US, Canada, and Australia
How Does the Math Work? A Real Example
Scenario: NRI in Singapore, 1-year horizon, USD 10,000
Option A — NRE Fixed Deposit (INR, 6%): ₹1,00,000 invested at 6% = ~₹1,06,000 after one year.
Option B — FCNR Deposit (USD, 6.6%): Same amount converted to USD at ₹86.7/USD, earns 6.6%, converted back at ₹94/USD = ~₹1,15,573.
Effective INR return on Option B: ~15.6% — largely because of INR depreciation over the same period.
Important caveat: the currency gain assumes INR continues to depreciate vs USD. Exchange rates can move in either direction, but historically INR has depreciated over most multi-year periods.
How Do You Fund an FCNR Deposit?
- Send SGD (or your source currency) to USD — or send USD directly if your account allows.
- Send the funds to your Indian bank using the funding instructions they provide.
- Ask the bank to convert the balance into an FCNR deposit.
Instarem supports USD transfers to India — the most common source currency for FCNR deposits. Compare rates before sending; on USD 10,000, a 0.3% difference is USD 30.
Key Takeaways
Available to all NRIs globally — Singapore EP holders are eligible.
FCNR deposits let NRIs hold savings in foreign currency at Indian banks, earning interest without INR conversion risk on principal.
Interest rates are currently up to 7.10% on USD — the highest in over a decade, driven by RBI’s special swap window.
All interest is tax-free in India. No TDS deducted.
The best rates (6–7.10%) are for 3–5 year tenors with a 1-year lock-in. The RBI window closes September 30, 2026.
Note: Interest rates are determined by individual banks and may vary by currency and tenure. Any rates mentioned in this article are indicative only. Please check with your bank for the latest applicable rates.
Frequently Asked Questions
Ready to open an FCNR deposit? Compare Instarem’s USD-to-INR transfer rates and send your funds to India in minutes.
