Key facts
- SBI has revised its FCNR(B) deposit interest rates following an RBI announcement.
- The new rates offer up to 5.75% per annum for deposits under $1 million and 6% for deposits above $1 million.
- These rates are applicable for maturities of three to five years.
- FCNR(B) accounts allow NRIs, OCIs, and PIOs to hold fixed deposits in foreign currencies with tax-free interest and protection against exchange rate fluctuations.
State Bank of India has updated its interest rates for Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, offering enhanced returns of up to 5.75% per annum for certain tenures and investment amounts. This move follows the Reserve Bank of India's (RBI) decision to cover hedging costs for new FCNR(B) deposits with maturities between three and five years, a measure effective until September 30, 2026.
The revised rates under SBI's Advantage scheme provide a maximum of 5.75% for deposits under $1 million and 6% for those exceeding $1 million, specifically for five-year US dollar-denominated deposits. For shorter tenures, rates range from 5.25% to 5.75% depending on the amount and duration.
FCNR(B) accounts are designed for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs), allowing them to hold fixed deposits in foreign currencies like USD, GBP, EUR, AUD, CAD, and JPY. These accounts offer tax-free interest in India, facilitate easy repatriation of funds, and provide a hedge against currency exchange rate fluctuations.
Premature withdrawals are restricted within the first year. Withdrawals after one year but before three years incur interest at 3.50%. For withdrawals between three and five years, interest is paid at a rate 1% lower than the applicable rate for the deposit's tenure.