Following the Reserve Bank of India's (RBI) recent measures aimed at attracting foreign currency inflows, several banks have launched Foreign Currency Non-Resident (Bank), or FCNR(B) schemes with attractive interest rates on US dollar deposits. Canara Bank, Bank of Baroda, Federal Bank and Indian Overseas Bank (IOB) have announced new FCNR(B) deposit schemes, offering attractive rates to attract Non-Resident Indians (NRI), Overseas Citizens of India (OCI) and Persons of Indian Origin (POIs).
These banks have made announcements in line with recent measures announced by the Reserve Bank of India (RBI) where it said that the government would bear the hedging cost on 3 to 5-year FCNR(B) deposits till September 30, 2026.. Let’s find out the latest FCNR(B) schemes launched by many banks.
Canara Bank’s new FCNR(B) scheme offers 6.5% interest rate
Canara Bank customers can now earn an attractive interest rate of up to 6.50% p.a. on USD deposits, with a flexible tenure ranging from 3 years to 5 years. The deposit carries a lock-in period of one year. The rate is effective from June 11, 2026.
Federal Bank launches FCNR Max Deposit Scheme
Federal Bank has launched a special FCNR(B) deposit in US Dollars. The scheme named ‘FCNR Max Deposit Scheme’ offers an interest rate of 6.25% for tenures of 3 to 5 years. The deposit also has a lock-in period of 1 year from the date of FCNR(B) account opening.
Premature closure details of FCNR Max Deposit Scheme
In the event of premature closure after the lock-in period, interest will be payable at a rate 1% lower than the applicable rate for the actual period the deposit in FCNR Max Deposit Scheme was maintained with the bank.
Bank of Baroda launches bob Legend FCNR(B) deposit
Under the bob Legend FCNR(B) deposit scheme, Bank of Baroda is offering interest rates of 6% on US dollar deposits with maturities of three years to less than four years, 6.1% on tenures of four years to less than five years and 6.50% on five-year deposits. The rates are applicable from June 17, 2026.
Indian Overseas Bank launches special FCNR(B) scheme
Indian Overseas Bank (IOB) has launched a special FCNR(B) scheme exclusively for NRIs, offering a 6.50% interest rate per annum on US Dollar deposits. The revised rates and special scheme came into effect on June 15, 2026, and will be valid till September 30, 2026.
Premature withdrawal rules of Indian Overseas Bank special FCNR(B) deposit
Under the special FCNR(B) scheme, no premature withdrawal is permitted for a period of 1 year from the date of making deposit.In case of premature closure of deposit after 1 year, interest will be payable at 1.00% lower than the rate of interest applicable for the period the deposit has run with the Bank
Latest FCNR(B) deposits launched by banks
| Tenure | Interest Rate on USD Deposits | Tenure |
| Canara Bank | Up to 6.50% p.a. | 3 years to 5 years |
| Federal Bank | 6.25% p.a. | 3 years to 5 years |
| Bank of Baroda | 6.00% p.a. (3 years to less than 4 years); 6.10% p.a. (4 years to less than 5 years); 6.25% p.a. (5 years) | 3 years to 5 years |
| Indian Overseas Bank (IOB) | 6.50% p.a. | 3 to 5 years |
What are the key benefits of investing in FCNR (B) deposits?
According to a Canara Bank statement, “Another important benefit of FCNR (B) deposits is that both the invested sum and the earned interest amount can be transferred abroad without any restrictions, offering total freedom to NRIs managing their financial affairs overseas. Besides, interest earned from FCNR (B) deposits is exempted from tax in India, which makes for an ideal investment choice for NRIs.”
Tax treatment on FCNR(B) deposits
Interest income earned on an FCNR deposit is completely exempt from income tax in India as long as the depositor holds NRI or RNOR (Resident and Not Ordinarily Resident) status.
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