Non-Resident Indians (NRIs) looking for better returns on their foreign currency savings have some good news.
ICICI Bank and Axis Bank have increased interest rates on their Foreign Currency Non-Resident (FCNR-B) deposit schemes.
Both private sector banks are now offering up to 6% interest on FCNR(B) deposits with tenures ranging from 3 to 5 years.
ICICI Bank and Axis Bank Increase FCNR Rates
ICICI Bank has raised the interest rate on FCNR(B) deposits with a maturity period of 3 to 5 years by 3.1 percentage points. After the revision, customers can now earn 6% interest on these deposits.
Axis Bank has also announced a similar increase. The bank has raised rates by 3.05 percentage points and is now offering 6% interest on FCNR(B) deposits with tenures between 3 and 5 years.
The move comes as banks compete to attract more foreign currency deposits from NRI customers.
Why Are Banks Raising These Rates?
Banks are trying to bring more foreign currency into the Indian banking system. As competition for NRI deposits increases, many lenders are making their FCNR schemes more attractive by offering higher returns.
The latest rate hikes are expected to encourage NRIs to keep a larger portion of their savings with Indian banks.
What Makes FCNR(B) Deposits Attractive?
FCNR(B) accounts allow NRIs to deposit money in foreign currencies such as US Dollars and other major currencies.
One of the biggest advantages of these accounts is that depositors are protected from exchange rate fluctuations. This means investors do not have to worry about currency conversion losses during the deposit period.
With interest rates now reaching 6%, FCNR(B) deposits have become a more attractive option for NRIs seeking stable and secure returns.
More Banks May Follow
Industry experts believe other major banks could also increase FCNR(B) deposit rates in the coming months.
If that happens, India could see a rise in foreign currency deposit inflows. Higher inflows would also help strengthen foreign currency liquidity in the country’s banking system.
