Cheer for NRIs! The RBI has enhanced the rate of interest ceiling for FCNR(B) deposits to in a single day Supplementary Reference Charge (ARR) plus 400 foundation issues for deposits with maturities between 1 month and no more than 3 years. This resolution used to be introduced via RBI governor Shaktikanta Das throughout the publish MPC meet on December 6 and objectives to attract foreign currency echange deposits from out of the country. Those revised charges will stay efficient till March 2025.
This represents a vital build up from the former ceiling of ARR + 200 foundation issues.
In line with the RBI remark on December 6, 2024, “In order to attract more capital inflows, it has been decided to increase the interest rate ceilings on FCNR(B) deposits. Accordingly, with effect from today (December 6, 2024), banks are permitted to raise fresh FCNR(B) deposits of 1 year to less than 3 years maturity at rates not exceeding ARR plus 400 bps and deposits with maturity between 3 to 5 years at rates not exceeding ARR plus 500 bps. This relaxation will be available till March 31, 2025.”
In line with the RBI notification as on December 6, 2024, “It has been decided to increase the interest rates ceiling on fresh FCNR(B) deposits raised by the banks with effect from December 06, 2024 as under:
For NRIs seeking to maintain fixed deposits in India, the FCNR Account provides an option to preserve overseas earnings in Foreign Currency.
What is FCNR (B) Account?
- An FCNR (B) account enables you to hold a fixed deposit in India using convertible foreign currencies, with deposit periods ranging from one to five years.
- The account, being maintained in foreign currency, protects your deposits from exchange rate variations throughout the deposit duration, according to an ET report.
- Similar to a Non-Resident External (NRE) bank account, both the principal amount and interest earnings in this account are exempt from taxation in India.
Regular Currencies Accredited:
Banks usually settle for FCNR deposits in six main currencies:
* US Greenbacks
* Kilos Sterling
* Euro
* Jap Yen
* Australian Greenbacks
* Canadian Greenbacks
