FCNR(B) deposits at 6–7%: the RBI swap window closed 31 August.

A concessional RBI swap facility pushed NRI dollar-deposit rates to multi-year highs — the window closed early, on 31 August 2026, and here's what to check if you already booked one.

If you are an NRI who holds dollars, there was an unusual window worth knowing about, and it has now closed. Through a circular dated 8 June 2026, the Reserve Bank of India introduced a concessional US dollar–rupee swap facility for banks against fresh FCNR(B) deposits with maturities of three to five years. The swap sharply cut what banks paid to hedge the currency exposure on those deposits, and banks passed much of that saving on as interest. As reported in mid-August, the RBI advanced the cut-off from the originally announced 30 September date — and, as reported since, closed the window early, on 31 August 2026, after an estimated $52.3 billion in inflows under the scheme. New deposits under this facility can no longer be booked; this note now covers what matters if you already have one.

What the window has done to rates

An FCNR(B) deposit is a fixed deposit held in a foreign currency — most commonly US dollars — so the depositor carries no rupee-depreciation risk; principal and interest stay in dollars and are fully repatriable. Ordinarily, USD FCNR(B) rates sit well below rupee deposit rates. Under the swap window, as reported across banking channels, large banks have been offering around 6% on three-to-five-year USD deposits, with at least one small finance bank advertising as high as 7.1% — several percentage points above where the same deposits stood earlier this year. Rates vary by bank, tenor and deposit size, and can be withdrawn or revised at any time, so treat any specific figure as indicative until confirmed by the bank in writing.

The conditions that matter

Two conditions come with the scheme. First, only fresh deposits placed on or before 31 August 2026, with an original maturity of three to five years, qualify — renewals and shorter tenors do not ride the swap. Second, qualifying deposits carry a one-year lock-in from the date of opening, so money you may need within twelve months does not belong here. Banks themselves have a little longer — reportedly until 11 September 2026 — to execute their swaps with the RBI. If you booked a qualifying deposit before 31 August, it is worth a quick check with your bank closer to that date that your deposit's swap was actually completed — the rate you were quoted assumed it would be.

The tax angle

For India, interest on FCNR(B) deposits is exempt from Indian income-tax for account holders who are non-resident — and the exemption generally continues through RNOR status after a return to India. Run your own dates through our residential status calculator if a move back is on the horizon. The exemption is an India-side rule only: a US tax resident, for instance, must still report and pay US tax on that interest — the mechanics are covered in our India–US cross-border tax guide. And if the deposit is part of a larger plan to hold or move funds, our note on NRE vs NRO accounts explains where FCNR(B) sits alongside the other two account types.

How Advisory Monks Consulting helps

Our Pravasi Desk works with NRIs on exactly this kind of decision — weighing an existing FCNR(B) placement against repatriation plans, RNOR timing, and home-country tax on the interest, so the deposit fits the larger picture rather than complicating it. If you already booked one under this window and want a second opinion on the RNOR or repatriation timing around it, speak with a partner.

This note is general guidance based on the RBI's June 2026 circular and rates reported by banks as of mid-August 2026, not investment, tax or legal advice. Rates and scheme terms can change without notice; confirm current terms with your bank, and speak with a partner before acting on anything described here.

This note is general guidance, not tax or legal advice. Positions depend on your specific facts — speak with a partner before acting.