The new product, named the FCNR Max Deposit Scheme, is targeted at non-resident Indian (NRI) customers seeking relatively stable, foreign currency-denominated investment options with higher yields.
According to the bank, the scheme has been launched in response to rising demand for such deposits in the NRI segment.
The deposit comes with a mandatory lock-in period of one year from the date of account opening. After the lock-in period, premature withdrawal is permitted; however, in such cases, interest will be payable at a rate 1% lower than the applicable rate for the actual tenure the deposit is held.
Joy P V, Country Head – Retail Liabilities at the bank, noted that the initiative is aimed at strengthening customer-focused offerings for NRI clients and enhancing value in foreign currency savings products.
Federal Bank reported that its total business mix stood at ₹5.78 lakh crore as of 31 March 2026.
The move comes after the RBI unveiled a special FCNR(B) swap facility and exempted incremental FCNR(B) deposits mobilised between July 1 and September 30 from cash reserve ratio (CRR) and statutory liquidity ratio (SLR) requirements.
A broad-based increase in FCNR(B) deposit rates has been seen across Indian lenders in recent days. Private sector lenders including ICICI Bank and Axis Bank have raised dollar deposit rates to 6% across the three- to five-year maturity bucket, while Kotak Mahindra Bank is offering up to 6.15% for larger-ticket deposits.
YES Bank has raised rates to as high as 6.60%, and CSB Bank has hiked its peak USD FCNR(B) rate to 7.05% for five-year deposits.
Public sector lenders have also joined the repricing cycle.
Bank of Baroda launched a special FCNR(B) deposit scheme offering up to 6% on five-year US dollar deposits, while Punjab National Bank and several other lenders have revised their FCNR(B) offerings in recent weeks.
First Published: Jun 16, 2026 1:34 PM IST
