RBI’s special FCNR(B) deposit deadline nears: Should investors tap this opportunity before 31 August? Expert weighs in
The Reserve Bank of India (RBI) has brought forward the deadline for its special FCNR(B) deposit swap facility, giving NRIs less time to lock in the higher interest rates offered under the scheme.
The RBI introduced a special USD-INR forex swap facility for Foreign Currency Non-Resident (Bank) deposits on 8 June 2026.
According to the RBI’s latest press release, forex inflows through FCNR(B) deposits had reached $52,300 million as of 13 August.
Following the encouraging response, the central bank has decided that the special swap facility for FCNR(B) deposits will be available only for deposits mobilised until 31 August, instead of the earlier 30 September deadline.
With the deadline approaching, here’s what NRIs should consider before opting for the special deposits.
Should investors consider the special FCNR(B) deposit?
Ankur Choudhary, CEO and Co-Founder, Belong, said, “The special FCNR(B) window is relevant for NRIs looking for higher foreign currency returns, but the decision should depend on their financial goals and investment horizon, as it comes with a 3-5 year lock-in”.
Who can invest in these special FCNR(B) deposits?
“FCNR(B) deposits are available to NRIs and OCIs looking for fixed income without taking INR currency risk. It may suit investors with a medium-term horizon who are comfortable locking in their funds for the applicable tenure of 3-5 years,” Choudhary noted.
He added that while premature withdrawal is allowed after one year, it may come with penalties and hence is not advisable for investors who may need the money before maturity.
What are the key benefits of special FCNR(B) deposits?
“FCNR(B) deposits allow NRIs to hold deposits in foreign currencies like USD without any INR exposure. Interest is generally exempt from Indian income tax, subject to applicable conditions, and the principal and interest are repatriable,” Choudhary noted.
However, he added that NRIs may have to pay tax in their country of residence, depending on the applicable tax laws there.
Can NRIs invest in FCNR(B) deposits after 31 August?
Yes. Choudhary has clarified that the 31 August deadline is only for deposits qualifying for the special RBI swap facility. Regular FCNR(B) can be opened after the deadline.
However, without the RBI swap facility, he said interest rates are likely to return to the levels prevailing before the special swap was announced in June, or potentially lower.
Will a special-window FCNR(B) deposit continue at the same rate after 31 August?
Yes. “Once the FD has been made, it will continue till maturity at the same interest rate,” Choudhary noted.
This means that once an investor locks in a rate under the special window, it will continue until maturity, even if regular FCNR(B) deposit rates are changed.
Who should avoid special FCNR(B) deposits?
“The special FCNR(B) window may not be suitable for investors who need liquidity in the near term or whose future financial needs are primarily in INR,” Choudhary said.
For UAE-based NRIs, he noted that USD-linked savings may be relevant given the AED’s (Dirham) dollar peg. However, those planning to use the funds in India should also consider their future INR requirements.
Can Indian residents invest in the special FCNR(B) deposits?
No. “FCNR(B) deposits are available only to eligible non-resident customers. Resident Indian investors cannot make FCNR(B) deposits,” Choudhary says.
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
About the Author
Sheetal Goel is a Content Producer at Livemint, where she covers corporate developments, personal finance, business trends, markets, and SEBI-related updates. She focuses on simplifying complex financial concepts and presenting them in a clear, reader-friendly manner, thereby helping audiences better understand investment trends, personal finance, and market developments. Her writing focuses on making finance more accessible to everyday readers while maintaining clarity, accuracy, and relevance.
She holds a degree in Economics (Hons.) along with an MBA in Finance, which has helped her develop a strong foundation in financial analysis, market understanding, and business reporting. Before joining journalism, she worked with finance and broking firms, where she closely followed market developments, investment strategies, and evolving industry trends. This practical exposure strengthened her understanding of financial markets. She has also written content across multiple formats and platforms, including YouTube, LinkedIn, and Instagram.
Over time, she has developed expertise in covering market-linked stories, investor-focused topics, and regulatory updates in a simplified yet informative style. She also enjoys reading and listening to Hindi poetry, reflecting her appreciation for literature and creative expression beyond the world of markets and numbers.
