NRIs Lured by 7.5% Returns on Dollar Deposits in India
For Non-Resident Indians (NRIs) in the UAE, there's an unusual choice when it comes to dollar savings. Indian banks are offering returns of up to 7.5% on selected US dollar fixed deposits for NRIs, which is significantly higher than what conventional bank accounts pay.
The RBI introduced a temporary swap facility on June 8, encouraging banks to raise longer-term foreign currency deposits. This reduced the burden on eligible deposits, allowing banks to offer higher interest rates. The facility applies to qualifying deposits with an original maturity of at least three years until September 30, 2026.
NRIs are raising questions online about this scheme, including whether the money can be easily brought back to the UAE and what happens if the deposit is closed early. It's essential for NRIs to understand the terms before moving their US dollars to an FCNR(B) deposit.