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Karur Vysya Bank (KVB), one of India’s leading private sector banks with a legacy spanning more than 110 years, has increased interest rates on its Foreign Currency Non-Resident (FCNR) deposits, offering Non-Resident Indians (NRIs) an opportunity to earn higher returns on their foreign currency savings.
According to a statement issued by the bank, KVB is now offering an interest rate of 7.00 percent per annum on U.S. Dollar (USD) FCNR deposits with tenures of three years and above. The revised rate is the highest in the bank’s FCNR deposit portfolio and allows NRIs to invest overseas savings for periods ranging from one to five years while maintaining their funds in foreign currency, thereby avoiding exposure to fluctuations in the Indian rupee.
The 7.00 percent rate is applicable to eligible USD FCNR deposits and is subject to a mandatory lock-in period of one year. Premature withdrawal will not be permitted during this period. After one year, premature closure may be allowed in accordance with the bank’s existing guidelines. In such cases, interest will be paid at the applicable run-period rate, less one percent, in line with the bank’s deposit policy.
The bank highlighted several benefits of the FCNR deposit scheme for NRI customers. Interest earned on FCNR deposits is currently exempt from income tax in India, while both principal and interest amounts are fully repatriable. Since deposits are maintained in foreign currency, customers are not exposed to exchange rate fluctuations involving the Indian rupee during the deposit tenure.
KVB also offers a forward contract facility, enabling customers planning to convert funds into Indian rupees at a later date to lock in an exchange rate. In addition, customers can avail themselves of loans against FCNR deposits without prematurely breaking the deposit. The bank said it also facilitates a seamless transition of accounts and deposit relationships when a customer’s residential status changes.
Commenting on the revised rates, B. Ramesh Babu, managing director and CEO of Karur Vysya Bank, said, “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.”
NRIs interested in opening FCNR deposits under the revised rate structure can apply through KVB’s digital banking channels, visit a KVB branch, or contact the bank via email at kvbnri@kvbmail.com.
