Karur Vysya Bank (KVB) has announced an increase in its Foreign Currency Non-Resident (FCNR) deposit interest rates, now offering up to 7.00% per annum on US Dollar deposits for tenures of three years and above. This move aims to provide Non-Resident Indians (NRIs) with higher returns on their foreign currency savings, with benefits including tax exemptions, no rupee exchange risk, and repatriation flexibility. The revised rates are effective from June 10, 2026.
Karur Vysya Bank Enhances FCNR Deposit Offerings
Karur Vysya Bank (KVB) has taken a significant step to attract Non-Resident Indian (NRI) savings by raising its interest rates on Foreign Currency Non-Resident (FCNR) deposits. Effective June 10, 2026, the bank is now offering a competitive rate of up to 7.00% per annum on US Dollar (USD) FCNR deposits for tenures of three years and above, marking the highest rate on its FCNR ladder. This initiative is designed to provide NRIs with an avenue to earn higher returns on their foreign currency savings while mitigating the risk associated with rupee fluctuations.
Attractive Rates and Tenures for NRIs
The revised FCNR deposit rates provide attractive options for NRIs looking to invest their overseas savings. The scheme allows deposits for tenures ranging from one to five years, with funds held in foreign currency. The specific rates are as follows:
- 1 Year and above but less than 2 Years: 5.00%
- 2 Years and above but less than 3 Years: 3.66%
- 3 Years and above but less than 4 Years: 7.00%
- 4 Years and above but less than 5 Years: 7.00%
- 5 Years: 7.00%
These rates are subject to change based on market conditions.
Special Terms for 7.00% USD FCNR Rate
The enhanced 7.00% rate is applicable to eligible USD FCNR deposits and comes with a mandatory lock-in period of one year, during which premature closure is not permitted. Post the one-year lock-in, premature closures may be allowed as per the bank’s existing guidelines, with interest paid at the applicable run period rate less 1%.
Key Benefits for NRI Customers
KVB has highlighted several key benefits for its NRI customers availing these FCNR deposits:
- Tax-Efficient Returns: Interest earned on FCNR deposits is currently exempt from income tax in India, and both principal and interest are fully repatriable.
- No Rupee Exchange Risk: Deposits are held in foreign currency, shielding investors from fluctuations in the Indian Rupee’s value during the deposit tenure.
- Forward Contract Facility: Customers have the option to book a forward contract to lock in an exchange rate for future conversion to Indian Rupees.
- Loan Against Deposit: Borrowing against an FCNR deposit is possible without breaking the deposit, allowing customers to meet short-term needs while keeping their funds intact.
- Smooth Account Transition: KVB ensures a seamless transition of deposits and relationships if a customer’s residential status changes.
Expert Commentary
Shri B. Ramesh Babu, Managing Director & CEO of Karur Vysya Bank, expressed optimism about the revised rates, stating, “NRIs want their foreign currency savings to earn more without taking on rupee risk, and these rates answer that directly. A 7.00% return on a US Dollar deposit is a strong proposition, the interest is tax-free in India under current rules, and the principal stays fully repatriable. We expect good traction from the diaspora, particularly those who plan to bring funds back to India over the next few years.”
Interested NRIs can apply through KVB’s digital banking channels, visit a branch, or contact the bank’s NRI Banking team via email at [email protected] or phone at +91 44 66217600 / +91 95855-02391.
Source: BSE
