RBI Revives NRI Dollar Deposit Scheme: Up to 7.1% Returns, Eligibility, and Deadline Explained

The Reserve Bank of India (RBI) has recently reinstated a special deposit window in US dollars for non-resident Indians (NRIs). This will help banks to attract foreign currency deposits at attractive interest rates. NRIs will be able to earn up to 7.1% interest on deposits in US dollars, depending on the bank and the structure of the deposit.

This is part of a global effort to stabilise inflows of foreign currencies and support external financing conditions due to uncertainty in the global financial markets.

What is the RBI’s NRI Dollar Deposit Scheme? 

Under specific deposit products, such as Foreign Currency Non-Resident (FCNR) deposits, banks in India can raise foreign currency deposits from NRIs. The deposits are available in a foreign currency so that NRIs can avoid exchange rate risk associated with both their principal and interest payments on the deposits.

The RBI opened the window again by providing banks with the ability to provide higher interest rates through their support of hedging costs making the deposits more appealing than traditional offshore dollar savings products.

Returns Up to 7.1% on Dollar Deposits 

The return on US dollar deposits within the scheme can be up to 7.1%. However, interest rates will vary based on a number of factors such as which bank is being used for the deposit, the length of time a deposit is held, current global interest rate conditions, and each bank's individual pricing strategy.

As a result, the actual return on deposits may be different from one bank to another. Therefore, Non-Resident Indians (NRIs) will also see different returns based on the country and duration of their investment.

Eligibility for NRIs 

This scheme is primarily open to Non-Resident Indians (NRIs), with some banks offering this scheme to Persons of Indian Origin (PIO) based on each bank's internal policies and guidelines from the Reserve Bank of India.

Funds provided by NRIs, materials must be deposited into either FCNR(B) accounts or through other eligible foreign currency deposit products offered by Indian banks.

Offering a stable US dollar return through a bank in India has been a major reason for NRIs to establish an FCNR(B) account within the Indian banking system.

Rates Offered By Different Banks

AU Small Finance Bank's rates which offer up to 7.1% on USD 5-year deposits are among the best rates available in the marketplace. After the Reserve Bank of India set up a special FCNR(B) facility, YES Bank changed its highest interest rate to 6.6% for USD 5-year FCNR(B) deposits on June 11.

State Bank of India, HDFC Bank, Central Bank of India and Bank of Baroda all have maximum FCNR(B) deposit rates of no more than 6% on FCNR(B) US dollar FCNR(B) deposits at comparable tenures. In addition, the Bank of Baroda has recently set up a new special FCNR(B) deposit scheme for non-resident Indian citizens in response to the Reserve Bank of India's policy changes.

Deadline for the Dollar Deposit Scheme

The Reserve Bank of India (RBI) has established a deadline of September 30, 2026, for banks to use the special swap facility and a closing date for banks to access the dedicated RBI window for using this type of swap is set for October 16, 2026. 

As a result, banks will have limited periods of time available for utilizing these facilities as needed, while continuing to meet their liquidity and capital needs. In order to qualify for this program, banks that wish to participate must complete all transactions within the prescribed timeframe. 

Meanwhile, funds raised pursuant to this program will be placed in a mandatory one-year lock up, whereby any withdrawals made prior to the end of that one-year period will not be permitted.