Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs) looking to park their foreign currency savings in India have only a few days left to take the benefit of zero hedging costs on 3-5 year Foreign Currency Non-Resident (Bank) deposits.The RBI in June said that the government would bear the hedging cost on 3-5-year FCNR (B) deposits. After this relief, many banks increased interest rates on their 3-5-year FCNR (B) fixed deposits. The RBI swap window was available till September 30, 2026, but when FCNR (B) drew huge USD deposits, the government advanced the deadline to August 31.But there are still 12 days left until the deadline. Banks may not decrease FCNR (B) immediately on 3-5-year tenors even if the deadline passes. It means NRIs, OCIs or PIOs can still benefit from high FCNR (B) deposit rates for some more days. Here, we take you through the highest FCNR (B) interest rates offered by the public and private sector banks. These rates are mainly of 3-5-year tenors.Private banks with highest FCNR (B) interest ratesIDFC FIRST Bank and IndusInd Bank are offering the highest FCNR (B) interest rate of 6.75% each on US dollar deposits. ICICI Bank, HDFC Bank and Axis Bank are offering their highest rate at 6.25% each to NRIs, OCIs and PIOs.Public sector banks offering highest FCNR (B) interest ratesAmong public-sector banks, Central Bank of India is offering the highest rate at 6.60%. Bank of Baroda, Canara Bank and UCO Bank are offering a 6.50% interest rate each, while Punjab National Bank’s highest rate is 6.45%.Here is a look at the highest FCNR (B) interest rates offered by public and private sector banks. Bank Deposit Rate - USD Public-sector Banks Central Bank 6.60% Bank of Baroda 6.50% Canara Bank 6.50% UCO Bank 6.50% Punjab National Bank 6.45% Private Banks IDFC First Bank 6.75% IndusInd Bank 6.75% ICICI Bank 6.25% HDFC Bank 6.25% Axis Bank 6.25% Note: Rates advertised on respective bank websites as of August 17, 2026. For deposits below USD 1 million with tenures of 3–5 years. Compiled by BankBazaar Note: Rates advertised on respective bank websites as of August 17, 2026. For deposits below USD 1 million with tenures of 3–5 years. Compiled by BankBazaarWhat is an FCNR(B) account?An FCNR (B) account allows NRIs, OCIs and PIOs to maintain deposits in foreign currencies, offering tax-free interest, easy repatriation of funds and protection against exchange rate fluctuations.Investors can invest in six foreign currencies- the US dollar, Australian dollar, Canadian dollar, Euro, British Pound and the Japanese Yen. Most banks, however, are offering their best FCNR (B) FD interest rates on US dollar deposits.Why the August 31 deadline mattersThe current higher-rate opportunity is primarily because of the hedging cost shifting to the government on 3-5-year FCNR (B) deposits. For NRIs and OCIs considering a longer-term foreign currency deposit, high interest rates provide a good opportunity to earn high returns. Banks are also providing up to 19x leverage to FCNR (B) investors, which may also help them multiply their profits.Once the August 31 deadline is over, banks may decrease their inflated rates on 3-5-year FCNR (B) deposits.
