How NRIs can benefit from their NRE, FCNR accounts till 31 Oct :-MINT 4 min read . Updated: 13 Jul 2022, 08:52 AM IST

 With RBI removing the cap on interest rates till 31 October, NRIs can earn more from deposits in these accounts

Deregulating interest rates is always good news for non-resident Indians (NRIs) as they can park their savings in attractively valued term deposits in India.

The Reserve Bank of India (RBI) recently removed the cap on interest rates on foreign currency non-resident bank, or FCNR(B), and non-resident external (NRE) account deposits for the period from 7 July to 31 October. The central bank’s move is aimed at attracting dollars into the country to check the rupee’s fall.

Rate hikes on FCNR(B) deposits in the last one week have made them quite attractive vis-a-vis term deposits in other countries. For instance, the annual percentage yield (APY) of certificates of deposits, or CDs—the US equivalent of fixed deposits in India, of the top five banks by total assets currently hovers around 0.02%-1.01% for 3-year deposits. Deposits maturing in 12 months offer rates at 0.02%-0.10%. In comparison, FCNR(B) deposits locked till 4 November with 12 months maturity and 36 months maturity will yield 2.5-4% and 2.88-3.8%, respectively.