If you’re an NRI with dollar savings earning 4–5% in a US account, the RBI has just opened a special window — Indian banks could offer you 5.5% to 7% on dollar fixed deposits, fully tax-free in India, until September 30.
Max rate on offer
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Tax in India
Window closes
The product is called an FCNR(B) deposit — a fixed deposit held in dollars at an Indian bank. You put dollars in, you get dollars back at maturity with interest. No rupee conversion, so there’s zero currency risk for you.
Normally, banks pay a hedging cost of 2–3% when taking in dollar deposits, keeping rates stuck around 3.5–5%. RBI’s new rule removes that cost — banks can swap their dollars with RBI at the same exchange rate, with no extra charges. RBI absorbs the currency risk, and banks pass the savings on to depositors.
The rupee has dropped ~7% this year, with oil crossing $100/barrel due to the Hormuz crisis.
India's forex reserves have slid from $728B in February to around $682B — a $46B drop.
NRI dollar deposits that brought $7B last year have crashed to under $1B this year.
In 2013, a similar scheme under Raghuram Rajan brought in $34B in just a few weeks, stabilising the rupee.
If a bank offers 6.5%+ and you have dollar savings you won’t need for 3 years — this genuinely beats US Treasuries at ~4.5%, tax-free.
If rates come in at 5.5–6%, compare your post-tax US CD or Treasury yield carefully before deciding.
There’s no rush — the window is open till Sep 30. Wait for actual bank rates to be announced (expected in 2–4 weeks).
This FCNR scheme is also part of a broader reform wave rolled out June 5–8, including tax removal on government bond interest for foreign investors, opening longer-term bonds (15, 30, 40-year) and green bonds to FPIs, and wider equity access for NRIs and OCIs. The FCNR window is the quick fix; the broader reforms aim to make India a more attractive long-term destination for foreign capital.
