FCNR Deposits 2026
Earn 16-17% Per Annum on Your Foreign Currency
Tax-free interest. Fully hedged. Paid as a single lumpsum at maturity.
Limited Window
RBI special FCNR window closes on September 30, 2026.
- Window closes September 30, 2026
- 16% p.a. (3-year) | 17% p.a. (5-year), paid at maturity
- $1M deposit → $10M FCNR via 9x leverage → $553K–$1.17M net gain
- Start from $10,000
- Tax-free interest for NRIs
- Fully hedged — zero INR risk
What Are Foreign Currency Non-Resident Deposits?
FCNR(B) deposits are fixed-term bank deposits that Non-Resident Indians hold in India in foreign currency, not in rupees.
Foreign currency in, foreign currency out
You deposit US dollars, the bank holds US dollars, and at maturity you receive US dollars back.
No rupee depreciation exposure
If the rupee falls during your deposit tenure, your money does not carry unhedged exposure.
Eligible customers
Non-Resident Indians, Persons of Indian Origin, and Overseas Citizens of India.
FCNR(B) vs NRE vs NRO vs RFC
When people compare NRE fixed deposits vs FCNR, the difference comes down to currency.
FCNR(B) deposits | NRE fixed deposits | NRO fixed deposits | RFC account | |
|---|---|---|---|---|
Currency Held | Foreign currency (USD, GBP, EUR, and other designated foreign currencies) | Indian rupees | Indian rupees | Foreign currency |
Who It Is For | Non-Resident Indians, PIO, OCI | NRIs remitting foreign income | NRIs with India-sourced income | Returning Non-Residents who have moved back to India |
Interest Taxable in India? | No, tax-free while NRI | No, tax-free while NRI | Yes, TDS applies | Depends on RNOR status |
Rupee Risk | None | Yes, on conversion | Yes | None |
FCNR(B) deposits
NRE fixed deposits
NRO fixed deposits
RFC account
Key takeaway: NRE deposits can earn in rupee terms, but carry exchange-rate risk. FCNR foreign currency term deposits are built for rupee depreciation protection.
The FCNR Scheme June 2026 Changed the Rate Economics
The Reserve Bank of India announced a special capital inflow package in response to external sector stress on the rupee and pressure on India foreign exchange reserves.
Interest rate ceiling removal
Banks were freed from the normal cap on FCNR deposit rates, allowing major bank FCNR desks to raise rates by an estimated 100-200 basis points.
Concessional swap facility
The RBI opened an at-par forex swap arrangement where the central bank absorbs the currency hedging cost that banks normally pay.
2013 precedent
In September 2013, a similar window raised approximately $26 billion in FCNR(B) deposits in about 3 months.
2013 FCNR(B) Window Outcomes
~$26B
FCNR(B) deposits raised in about 3 months
~$34B
Total inflows including bank capital
Stabilized
Rupee recovered from record lows within the window
~3 Months
Window opened, then closed
Structure, Rates, and Economics
Everything below is illustrated on a US$ 1,000,000 base deposit. Interest accrues over the full 3 to 5 year tenor and is paid as a single lumpsum at maturity.
Starter tier
US$ 10,000
minimum entry
6.55% p.a.
Deposit rate only — no leveraged spread
At this tier, you earn the standard FCNR(B) deposit rate without leveraged returns.
Premium tier
US$ 500,000 – 1,000,000+
unlocks full leverage
16% p.a.
3-year | 17% p.a. 5-year
Net annualized return after borrowing costs
At maturity — 3 Years
$553,480
net gain before fees
At maturity — 5 Years
$1,169,830
net gain before fees
Return per annum = (net proceeds ⁄ deposit)1/years − 1, shown before fees, realized as a single lumpsum at maturity. Fees are payable separately.
Tenor
3-5 years
Lock-in
1 year
Eligibility
NRI / PIO / OCI, subject to bank KYC and source-of-funds verification
Scheme window
Deposits accepted till September 30, 2026 under the RBI swap facility
Who Should Consider This?
This is right for you if
- You are an NRI, PIO, or OCI with foreign currency capital, starting from $10,000, with $500K to $1M+ unlocking the 9x leverage tier.
- You have a genuine 3-5 year horizon and do not need this money earlier.
- You understand and are comfortable with a leverage mechanism.
- You prefer a defined, locked structure over market speculation.
- You are a tax-conscious investor who values tax-free interest NRI treatment.
This is NOT for you if
- You may need liquidity within 1 year, because a 1-year lock-in applies.
- You are uncomfortable with any leverage at all.
- Your residency status may change unpredictably soon.
- You want annual income payouts rather than a lumpsum at maturity.
Frequently Asked Questions About FCNR Deposits 2026
Contact FAAB Today
Bookings take 2-3 weeks to process. Contact FAAB Invest to get your personalized term sheet and lock in 16-17% per annum before the window closes.
Email: invest@faab.in | Call: +91-8604773377
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FAAB Invest is a wealth management platform operated by FAAB Invest Advisors Pvt Ltd (`"`FAAB Invest`"`) ( CIN : U67100KA2022PTC169318). By accessing the website or the mobile application, you agree to adhere to its terms of services and privacy policy. The content on the website or the mobile application should not be construed as investment, business, legal, or tax advice, and it does not constitute an offer by FAAB Invest to sell investment products. Any information provided on the website or the application or linked websites/apps does not solicit an offer to invest or investment advice. FCNR(B) deposits are bank products regulated by the Reserve Bank of India. The structure described involves SBLC-backed borrowing and carries a 1-year lock-in with early exit costs. All figures shown are illustrative, based on indicative rates of 6.55% p.a. (deposit, compounded half-yearly) and 5.85% p.a. (borrowing, simple interest) available under the RBI special window, shown before fees. Returns of 16% p.a. (3-year tenor) and 17% p.a. (5-year tenor) accrue over the tenor and are realized as a single lumpsum at maturity, not as annual payouts. This page is for information purposes and is not investment, legal, or tax advice. Please consult your chartered accountant or tax advisor regarding DTAA, Form 15CA/15CB, and FBAR/FATCA obligations applicable to you.
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