FCNR FD interest rates: SBI vs PNB vs HDFC Bank vs ICICI Bank - which gives you best rates; eligibility and taxation on interest explained

A Foreign Currency Non-Resident (FCNR) account allows non-resident Indians (NRIs) to invest in fixed deposits (FDs) in a foreign currencies such as US dollar, British pound, and Canadian dollar among others in India. The most attractive feature of FCNR FDs is that interest earned is exempt from income tax if the investor is an NRI or a Resident but Not Ordinarily Resident (RNOR). Many Indian banks, public sector undertakings (PSUs) and private banks, offer FCNR FDs at attractive interest rates. In this write-up, we will take you through FCNR rates that State Bank of India (SBI), Punjab National Bank (PNB), HDFC Bank and ICICI Bank have been offering to their depositors. We will also explain taxation rules for FCNR depositors.

FCNR interest rates: SBI vs PNB vs HDFC Bank vs ICICI Bank

While PSU banks offer FCNR FD investments in US dollar, British pound, Euro, Canadian dollar, Australian dollar and Japanese Yen, private sector banks mainly focus on US dollar and Canadian dollar FCNR FDs.


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SBI FCNR FD rates (w.e.f. January 15, 2026)

Period of deposit	USD (%)	GBP (%)	EURO (%)	CAD (%)	AUD (%)	JPY (%)
1 year	4.4	4	2.75	2.97	3.75	0.4
Above 1 year to < 2 years	4.4	4	2.75	2.97	3.75	0.4
2 years to < 3 years	3.55	3.95	1.25	2.72	3.65	0.4
3 years to < 4 years	3.35	3	1.25	2.47	3.55	0.4
4 years to < 5 years	2.95	2.9	1.25	2.52	3.45	0.3
5 years	3.05	2.8	1.25	2.57	3.35	0.3

(Data source: SBI official website)

PNB FCNR FD rates (w.e.f. April 1, 2026)

Currency	1 yr < 2 yrs (%)	2 yrs < 3 yrs (%)	3 yrs < 4 yrs (%)	4 yrs < 5 yrs (%)	5 yrs only (%)
USD	5.01	3.49	3.26	2.97	3.07
GBP	4.04	2.79	2.34	2.24	2.04
EUR	2.54	1.3	1.3	1.3	1.3
JPY	0.23	0.23	0.23	0.23	0.23
CAD	3.03	2.61	2.36	2.41	2.46
AUD	3.81	3.36	3.07	—	—

(Data source: PNB official website)

ICICI Bank FCNR FD rates (w.e.f. April 28, 2026)

Tenure	USD (%)	GBP (%)	CAD (%)	SGD (%)	AUD (%)
12 months to < 24 months	3.85	4.1	2.35	1.25	4.35
≥ 24 months to < 36 months	3.35	3.85	2.45	1.2	4.2
≥ 36 months to < 48 months	3	—	—	—	—
≥ 48 months to < 60 months	2.9	—	—	—	—
60 months	2.9	—	—	—	—

(Data source: ICICI Bank official website)

HDFC Bank FCNR FD rates (w.e.f. April 1, 2026)

Period	GBP (%)	USD ≥5L–<1M (%)	EURO (%)	JPY (%)	AUD (%)	CAD (%)	SGD (%)
1 yr to < 2 yrs	4	3.65	2.2	0.55	4.45	2.4	1.35
2 yrs to < 3 yrs	N/A	3	N/A	N/A	3.9	1.9	N/A
3 yrs to < 4 yrs	N/A	2.9	N/A	N/A	3.8	1.8	N/A
4 yrs to < 5 yrs	N/A	2.5	N/A	N/A	3.7	1.65	N/A
5 yrs only	N/A	2.3	N/A	N/A	3.5	1.45	N/A

(Data source: HDFC Bank official website)

To understand the taxation rules of FCNR FDs, ET Wealth Online spoke to Sandeepp Jhunjhunwala, partner, Nangia Global Advisors, and Sandeep Sehgal, partner-tax, AKM Global.

Is interest earned on FCNR fixed deposits taxable in India for NRIs?

Sandeepp Jhunjhunwala says interest earned by NRIs on FCNR FDs is exempt from tax in India, subject to prescribed conditions under the Indian income tax laws.

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According to Jhunjhunwala, exemption applies when the interest is payable by a scheduled bank on eligible foreign currency deposits maintained by a person who qualifies as a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR) in India. Accordingly, as long as the depositor continues to hold the requisite residential status under the income tax law and the deposit is maintained in accordance with applicable FEMA/ RBI regulations governing FCNR deposits, the interest earned thereon remains tax-exempt in India, says Jhunjhunwala.

Does the tax treatment change if the NRI becomes a resident during the tenure of the deposit?

Sandeep Sehgal says FCNR interest remains exempt from taxation as long as the depositor qualifies as an NRI or RNOR under Section 10(15)(iv)(fa) of the Act.

Once the individual becomes a Resident and Ordinarily Resident (ROR), the FCNR interest becomes taxable in India from that date, even if the deposit was opened earlier, Sehgal explains.

Can FCNR interest be taxed in the country of residence?

Jhunjhunwala says many jurisdictions follow the principle of taxing residents on their global income, which may include interest earned on overseas bank deposits such as FCNR accounts.

In such a situation, Jhunjhunwala suggests NRIs and RNORs will separately assess the tax treatment of such income in their country of residence and comply with any tax payment or disclosure obligations applicable there.

Is Double Taxation Avoidance Agreement (DTAA) applicable to interest from FCNR deposits?

According to Sehgal, DTAA provisions do not have a direct application to FCNR deposits in India, as the interest earned thereon is fully exempt from tax in India for NR and RNOR.

However, the relevance of a DTAA arises where such interest income becomes taxable in both jurisdictions, typically upon a change in the individual’s residential status to ROR, wherein global income becomes taxable in India, explains Sehgal.

What happens to FCNR FD taxation if the depositor returns to India permanently?

Sehgal says when a depositor returns to India permanently, interest on FCNR deposits continues to remain exempt from tax during the period in which the individual qualifies as a RNOR under Section 10(15)(iv)(fa) of the Act.

Citing another condition, Jhunjhunwala points out that once the individual becomes a ROR in India, the exemption ceases and subsequent interest accruals become taxable in India.

Is TDS applicable on FCNR FD interest?

Giving an example of RBI guidelines, Sehgal says an individual is permitted to continue holding an FCNR account till maturity even after becoming a resident in India, subject to redesignation upon maturity by informing the authorised dealer bank of the change in residential status.

However, upon redesignation, the deposit assumes the character of a resident bank deposit, and interest earned thereafter would be subject to TDS in accordance with Section 194A of the Act, explains Sehgal.

Can an Overseas Citizen of India (OCI) invest in FCNR FD? What will be the taxation rules for them?

Jhunjhunwala says OCIs can invest in FCNR FDs and tax treatment for OCI holders is broadly similar to that of NRIs. Accordingly, interest earned on FCNR deposits by an eligible OCI holder is exempt from tax in India, provided OCI satisfies the prescribed conditions relating to residential status and deposit eligibility.

Do NRIs need to report FCNR deposits in Indian income tax returns?

According to Sehgal, NRIs and RNORs are generally not required to report FCNR deposits in their income tax return (ITR).

Further, if their total income chargeable to tax after including income from such deposits exceeds the basic exemption limit, they are required to file a return of income in India, says Sehgal, adding in such cases, although the interest earned on FCNR deposits remains exempt from tax, it must still be disclosed under Schedule EI (Exempt Income) in the return.