NRI Dilemma: FCNR Deposits vs US Treasuries for $100,000 Abroad

For Non-Resident Indians (NRIs) with $100,000 abroad, investing decisions have become more complex. FCNR deposits now offer higher USD yields than US Treasuries, but come with trade-offs. Indian banks are offering around 6 to 7 percent on 3-5 year USD FCNR(B) deposits until August 31, 2026.

US Treasuries, on the other hand, yield about 4.18 percent for 2-year paper, 4.65-4.72 percent for 10-year paper and 5.24-5.31 percent for 30-year bonds. NRIs need to consider their liquidity needs, tax residency, currency expectations and how long they can lock away their money.

The choice between FCNR deposits and US Treasuries depends on individual circumstances. While FCNR offers higher returns, it has a longer lock-in period, lower liquidity, and exposure to an Indian bank's risk.