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.

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”.

“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.

“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.

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.

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.