The special deposit scheme is available for tenures ranging from three to five years and carries a one-year lock-in period.
The revised rates became effective from June 11.
The bank said the scheme is being offered in multiple foreign currencies, including the US dollar, British pound sterling, euro, Canadian dollar and Australian dollar.
The launch comes after the RBI announced a temporary facility allowing banks to fully absorb hedging costs on fresh FCNR(B) deposits with maturities of three to five years mobilised between June 8 and September 30.
The measure, similar to a scheme introduced in 2013, aims to boost foreign currency inflows and support the rupee amid external pressures.
According to Ashok Kumar E R, Chief Client Officer, Scripbox, a wealth management platform, the RBI’s move has enabled banks to offer more competitive interest rates, currently in the 6-7% range for US dollar-denominated FCNR(B) deposits.
FCNR(B) deposits allow NRIs to maintain deposits in foreign currencies without taking on rupee exchange-rate risk, as both the principal and interest remain denominated in foreign currency.
The deposits also offer full repatriability and interest income is exempt from tax in India for eligible depositors.
Kumar said FCNR(B) deposits are particularly suited for NRIs with stable foreign currency income seeking capital preservation and predictable returns rather than high-yield investments.
He added that investors should assess their liquidity needs and overall financial goals before allocating funds to such deposits, as premature withdrawals attract penalties and the elevated rates are available only for a limited period.
Canara Bank also said it will offer loan facilities against FCNR(B) deposits under the scheme.
First Published: Jun 17, 2026 7:58 AM IST
