Bank of Baroda Raises FCNR(B) Deposit Rate to 6.25% for NRIs on USD Deposits

Key Takeaways

1. Bank of Baroda launched the “BoB Legend FCNR(B) Deposit Scheme” on June 16, 2026. It offers NRIs up to 6.25% per annum on 5-year USD deposits, the highest among large Indian banks.
    
2. Just one week earlier, Bank of Baroda had set its peak FCNR(B) rate at 6%. The new scheme raises that by 25 basis points, following the RBI’s move to absorb hedging costs for banks.

What is the BoB Legend FCNR(B) Scheme? Who Does it Benefit?

Interest rate on FCNR (B) deposits has been increased by up to 50 basis points, giving a maximum rate of 6.25% on five-year USD deposits. The scheme launched on June 16, 2026, has been named “BoB Legend FCNR (B) Deposit Scheme.”

Earlier, the bank had launched a maximum rate of 6% for the same tenor after RBI operationalised the FCNR (B) scheme, whereby the entire hedging cost would be absorbed by the bank.

NRIs could enjoy the dual benefits of earning and liquidity by taking an overdraft/loan facility against FCNR (B) deposits with full flexibility. Tenure options for deposits range from one year to five years, with the maximum rate applicable to five years.

BoB Legend FCNR(B) Deposit Rates (June 16, 2026)

How will this affect NRIs and India’s Foreign Exchange Inflows?

FCNR(B) inflows dropped sharply, falling from $7.08 billion in FY25 to $946 million in FY26. The RBI’s new swap window directly addresses this decline. The RBI makes it cheaper for banks to raise these deposits by bearing the hedging cost. 

Banks may then be able to offer higher interest rates to attract non-resident depositors, increasing foreign-currency inflows into the banking system.

Most large banks are currently offering peak FCNR(B) deposit rates of around 6%. State Bank of India, HDFC Bank, ICICI Bank, and Axis Bank are offering rates of up to 6% on deposits with maturities ranging from three to five years. At 6.25%, Bank of Baroda now leads among large public-sector banks. 

According to data tracked by LoansJagat, NRI fixed deposits remain one of the most searched banking products among overseas Indians, with FCNR(B) queries rising sharply after the RBI’s June 2026 swap window announcement.

What do Experts say? What should NRIs do?

NRIs could earn annual returns of 15 to 27% under the new FCNR(B) scheme under the RBI’s latest swap window, according to brokerage estimates. This is because the RBI absorbs the currency hedging cost. 

Banks had to buy currency hedges from the market at a cost of roughly 3.5% per year before this window opened. Banks have room to offer rates that are 150 to 200 basis points higher, with that cost removed.

Analysts estimate the RBI’s measures could attract between $30 billion and $60 billion in deposits from NRIs. Even at the upper end, the inflows would account for only around 2% of the banking system’s deposit base, which limits the impact on overall funding costs. 

NRIs considering FCNR(B) deposits should note that any deposit opened under the swap window scheme comes with a one-year lock-in. After 12 months, early withdrawal is permitted, typically with a penalty.

Conclusion

Bank of Baroda’s 6.25% rate on 5-year USD deposits under the BoB Legend FCNR(B) scheme makes it one of the most competitive NRI deposit products in India as of June 2026. The RBI is absorbing hedging costs and exempting these deposits from CRR and SLR requirements until March 2027. This window offers a rare combination of high returns and currency protection for the Indian diaspora. NRIs should act before the RBI scheme closes or banks revise rates downward.

FAQs

Can NRIs freely transfer their FCNR(B) deposit money and interest back abroad under Bank of Baroda's bob Legend scheme?

Yes. Both the principal and interest earned under Bank of Baroda’s BoB Legend FCNR(B) Deposit Scheme are fully repatriable. There are no RBI restrictions on transferring funds abroad. Interest earned is also tax-free in India.

Are there any other banks also hiking FCNR(B) interest rates post the RBI’s swap facility launch? Is 6.25% offered by Bank of Baroda worth it?

Yes. There are banks such as State Bank of India, HDFC Bank, ICICI Bank, and Axis Bank, which are offering up to 6% interest on FCNR(B). Bank of Baroda’s 6.25% rate on 5-year USD FDs stands out as being the best amongst major Indian banks.